The Property Owners’ Liability Insurance protects landlords and property owners in respect of claims made against them in respect of their legal liability for personal injury or property damage suffered by third parties and arising from the policyholder’s ownership of the property.
If you are the owner of a property and are renting out rooms, it is your legal responsibility to ensure that you have public liability and property owners’ liability insurance. If you haven’t got insurance then your renters insurance will be void: this means that in the event of the tenancy ending abnormally and the renter bringing a claim against you everything will be paid for out of your pocket.
If you are renting out a property and another person is injured or property damaged on the property, you are not liable for their injuries unless you were at fault. This means that you will need to prove that you were at fault in order to claim against your tenancy insurance.
You will be presumed liable for any injuries or property damage if you are the owner of the property and don’t have public liability or property owners’ insurance, as the law assumes that you have taken precautions to protect the people who visit your property, and the reason you are not covered is because you haven’t taken the appropriate steps to ensure that your property is safe.
Property owners insurance is much cheaper than a normal private renter’s insurance because its risk is substantially lower. This reflects the difference in the potential claims against a landlord in comparison to a normal tenant.
Private renter’s insurance protects both landlords and tenants, whereas property owners insurance only protects landlords and property owners. It is the responsibility of landlords to ensure that their tenants are legally covered before they rent out the property: if this isn’t done then there is a risk that landlords will end up paying for any claims against their tenants out of their own pocket.
Property owners’ liability insurance ensures that landlords will not have to make any excessive payments if they are renting out their properties as the policy will pay out for any claims for insured damages.
Even the cheapest insurance excesses are usually over £100 and therefore if a renter has any claim against them then the insurance excess will have to be paid for out of the landlord’s pocket; which is often out of the control of the landlord and therefore could severely impact their disposable income.
If a fire occurred in the property, then the landlord would have to pay for the property damage, and also for the cost of the firefighters who attended the fire, and the cost of any relocating expenses for the renter.
If a siege occurs in the property, the landlord would have to pay for any damage, the cost of the police or other emergency services, and also the cost for suspending the tenancy agreement, and any other associated costs.
If the property burns down, then the landlord would have to pay for all of the costs associated with the property damage, and might even have to pay for the costs of finding alternative accommodation for the renter.
If the renter is found to have committed fraud they then might be found guilty of corporate manslaughter or corporate homicide and could face a prison sentence for a substantial amount of time: if the renter is a UK citizen, the landlord could be awarded compensation by the police force for suffering premeditated violence.
If the property is rented out for investment purposes, property owners’ liability insurance is always recommended. Often landlords will rent out a property without taking out any insurance for the property, which has a substantial low risk of any serious incidents occurring.
A property owners’ liability insurance policy will only provide cover to the policyholder and not for the tenants within the property, as the policy is only intended to protect the property owners’ legal liability for the property which can be a useful security net for any problems that arise.
Be careful that you do not leave any spaces open on your tenancy agreement, as it is very easy to forget to ask for the tenant’s full name, or any other contact details which can then significantly impact on your property owners policy, as it isn’t legally required to provide cover against any incidents which occur on the property as long as you have notified your insurance company of the tenants.
Treating a tenant or renter unfairly
If a tenant or renter feels that they have been treated unfairly, they can apply for unfair eviction, and the property owners’ liability insurance will protect the landlord from having to pay for any property damage or any other consequences of the claim.
If a tenant persistently makes false or exaggerated claims, they can be deemed to be making vexatious allegations and therefore the policy will legally protect any landlord from having to pay any compensation to the renter. It is your legal duty to make sure that you have property owners insurance, if you don’t then you will be guilty of corporate manslaughter or corporate homicide: this could have considerable implications on there life and their rights to live and work in other countries.
Property owners insurance is a legal and necessary obligation for anyone who owns a property, rented or owned, and has renters who visit their home.