Home insurance 101: Liability coverage explained

Don’t let the name fool you: home insurance can protect much more than your property. In fact, the liability coverage included in your property policy might just be one of the best insurance protections you have – and you might be surprised to find out just how far this coverage goes! Here’s what you need to know about liability insurance, plus answers to a few more burning questions we hear a whole lot.

What does personal liability mean on my home insurance?

Liability – it’s a term you hear all over the place in the insurance world. But what does it actually mean? Well, if you’re liable for something, it means you’re legally responsible for it. And under your home insurance, liability coverage could protect you financially if you’re found liable for certain unintentional actions or events. Harmful acts that are done on purpose, like violence, libel or slander, aren’t covered.

So, when would you actually use liability coverage? Don’t worry, we’ll go over all that next.

What does the personal liability on my home insurance cover?

Personal liability can protect you if you unintentionally cause bodily injury to someone, or if you accidentally damage someone’s property. It could also protect anyone else named on your policy (like your spouse), and any dependents living with you. And, because accidents happen at home and abroad, you’re covered wherever they might occur.

Another big plus? It provides coverage if someone is injured on your property due to your negligence (this is sometimes called premises liability). Things that could be covered include legal bills if you’re sued, payouts for damages you’ve caused, or if you have to pay someone else’s medical bills.

Let’s take a look at some real-life situations where your liability could come into play:

You didn’t shovel your walkway and a courier slips and breaks their arm
You break a bystander’s nose with a ball while you’re golfing in Florida, and you’re sued for medical costs
A tree branch from your property cracks during a windstorm and damages your neighbour’s roof
Your feisty new pup bites the mailperson and they need to get stitches

In all these scenarios, without liability, you could end up paying out of pocket to cover legal and/or medical costs, or to repair or replace damage you’ve caused to someone else’s property. That’s why this coverage is so important – you never know when you’re going to need it! Think of it as a buffer that covers these unexpected costs.

Heads up! Your home policy doesn’t cover liability for car accidents – that’s what your car insurance is for. Find out more about what liability for a car does and doesn’t cover.

Does liability cover medical expenses for me and my household, too?

Like we said above, medical expenses for others could be covered by the “bodily injury” part of your liability coverage. But, it doesn’t cover your own medical payments if you get hurt. And, it doesn’t pay for anyone else who lives with you. It only applies if you cause injury to someone else.

How much liability insurance do I need for my home?

With liability, more is always better. Now, we Canadians aren’t as lawsuit-happy as our neighbours to the south, so getting sued isn’t quite as common here. But, you still want to make sure your bank account doesn’t get drained if something happens and you’re on the hook to pay for damage or medical costs. And more often than not, these bills are pricey.

As a rule of thumb, a $1 million limit is recommended – but $2 million or more is ideal. And don’t worry – usually, raising your limit won’t make your payments go up by too much. So, it’s well worth the few extra dollars a month.

If you want to know how much it would cost, do a quick quote online if your insurer offers online services. (At Sonnet, you can quote and adjust your coverage directly through your online account!) Or, get in touch with your insurer over the phone.

How much does personal liability cost?

Because liability comes with your home insurance, it can be hard to break down exactly how much it costs separately. Not only that, but every individual’s home insurance premium will be different. This is because premiums are based on personal factors like your age and your credit score, not to mention important details about your home like where it’s located, the building materials that were used, and how old it is. So, liability coverage will be priced differently for every homeowner.

But if you’re trying to cut your insurance bill, you might want to think twice before selecting the minimum limit for liability. Since it really doesn’t make a huge difference in premium, your safest bet is to select a higher limit – and add that extra protection.

Tip: Check out five wallet-friendly steps you can take to help you save on your home insurance!

Does my personal liability cover me for my home business or home daycare?

No. Most insurers don’t include coverage for home-based businesses or home-based daycares. So if you’re running a hair salon out of your basement or picking up some extra cash taking care of other people’s kiddos, find out if you can add business coverage to your current home policy. Otherwise, you might need to get a separate business policy.

If you’re unsure, it’s best to give your insurance provider a call to chat about your options so nothing falls through the cracks.

What are the most common liability claims on home insurance?

We don’t think you’ll be too surprised to hear that the most common types of liability claims are related to accidents that could happen on your very own property. Here are just a few of them:

Slips, trips and falls generally top the list. They usually happen when a homeowner fails to fix a hazard – like a broken stair – or doesn’t clear an icy walkway during the winter. Make repairs and take precautions to avoid these common injuries. Proper lighting is also super important to keep people safe, so don’t forget to replace those burnt-out lightbulbs!
Dog and animal bites are right up there, too. If your dog’s the nippy type, be sure to keep it outside or safely restrained if you’re having guests – and when the mail’s being delivered! But, keep in mind that dog bites can be a grey area when it comes to claims. If you have a dog, talk to your insurer about what could happen if it bites someone since not all cases could be covered.
Swimming pool accidents – especially with children – are the cause for some of the more serious claims. Keep your pool area clean and safe. And never, never leave young kids alone by the pool. Visit the Government of Canada’s guide for everything you need to know about pool safety.
Falling trees and limbs, especially during the stormy seasons, often turn into liability claims. Just imagine how much it could cost to repair your neighbour’s roof if your tree fell and crashed through it! It just goes to show you that even unavoidable accidents can turn into gnarly – and expensive – situations. Nip any problems in the bud by pruning your trees and having them inspected if it looks like there’s any rot or damage.

We know it can be hard to think of every little thing that could go wrong. This is why it’s so important to keep your property well-maintained and to act prudently both at home and when you’re out and about. At the end of the day, you’re responsible for not only keeping a home that’s safe for everyone, but also the actions of your family, your pets, and yourself.

Have questions about your policy? Want to know more about managing risk? Your insurer can help demystify this tricky and often misunderstood coverage so you can focus on keeping yourself, your family, and your guests safe. Want to speak to us? Reach out via email or chat. We’re happy to help!

Protect your home and the things you love most.