There seem to be so many insurances you need as a landlord, and you might be forgiven for wondering if they are all necessary.
Often they are bundled together and you might think that taking out a few of the extras would reduce your premiums? Take occupiers liability cover – why would a landlord be liable for what an occupier – the tenant – gets up to?
If you are a landlord not living on the premises, you do not need occupier’s liability cover, as you are not the occupier. Your tenant is. So, tenants’ liability insurance (or occupiers’ liability insurance or tenancy liability insurance) is their responsibility.
What you need is comprehensive Property Owners’ Liability policy as you own the property: this will include public liability cover and can be included in Landlords’ building insurance . It covers any illness, injury or damage that the owner of a property may be deemed liable for. Do check.
Typical scenarios include a tile falling off the roof and damaging a parked car outside, or someone (the tenant or their guests) tripping over a loose carpet or down a poorly maintained set of stairs. As the owner of the premises – the landlord – you would be liable for the accident. Property Owners Liability cover will have your back should a compensation claim arise.
A specialist tenant’s contents insurance policy will normally include occupier’s liability for any accidental damage that they may be liable for while living at the property. This can include their liability to the landlord (eg spilling a glass of wine on the carpet or accidentally causing damage to the landlord’s furniture or fittings) and their liability to visitors.
It can also include their occupier’s liability to visitors who are injured or suffer losses on the premises. It is up to the tenant to arrange and pay for this cover, and it is often a condition of the tenancy agreement that they do so. Are you sure your tenants have such cover in place?
Tenants have a duty of care to lawful visitors (and even a limited duty to trespassers). If a party gets out of hand, for instance, or unguarded fires or open windows when children visit cause an accident, the tenant could be found liable. So, their insurance cover should include occupiers’ liability.
However, if the injury occurs because of the disrepair of the premises you, as the landlord, could be held liable. If you have not carried out essential routine works or repaired defects that you have been made aware of, then the buck passes to you.
Also, an injured party may have to pursue you if the tenant has no insurance. These risks, however, can be covered by a good Property Owners Liability policy – but do check with your insurance broker and explore all these scenarios.
It goes without saying, of course, that liability cover is no substitute for good maintenance and risk management.
FP925-2020
The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited trading as Deacon accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.