Property Owners Liability

What does property owners’ liability mean?

Property owners’ liability is cover for certain claims made against the owner of an insured property. It may apply when a tenant, visitor or other person suffers an injury, loss or property damage linked to the premises.

The cover may pay compensation and legal defence costs if the property owner is legally liable. The Financial Ombudsman Service explains how liability insurance complaints may be considered.

An accident at the property will not always lead to a successful claim. Legal responsibility must usually be shown, and the event must meet the policy’s terms, limits and conditions.

Property owners’ liability may form part of landlord insurance. Depending on the insurer, it may be included as standard or offered as an optional section.

When might the cover apply?

Possible examples include:

• A tenant or visitor is injured by a loose stair or handrail.
• Part of a poorly maintained building falls and injures a passer-by.
• A fault at the property causes accidental damage to a neighbouring home.
• A visitor slips in a shared area for which the insured owner is responsible.

These examples do not mean that a claim will automatically be paid. The insurer will consider what happened, who controlled the area and whether the property owner took reasonable steps to manage the risk.

The owner may not always be the person responsible. A tenant, managing agent or contractor could control the relevant part of the premises.

What duties does a property owner have?

In England and Wales, the Occupiers’ Liability Act 1957 sets out a duty to take reasonable care to keep lawful visitors reasonably safe.

Different rules apply in Scotland and Northern Ireland. In each case, responsibility can depend on who occupies or controls the premises and the facts of the incident.

Landlords also have wider repair and safety duties. GOV.UK outlines landlords’ responsibilities, including keeping rented properties safe and maintaining relevant gas and electrical equipment.

Insurance does not remove these duties. Owners should inspect, maintain and repair their properties when needed.

What can property owners’ liability cover?

Depending on the policy, cover may include:

• Compensation the insured is legally required to pay.
• The claimant’s legal costs.
• The cost of defending a covered claim, with the insurer’s approval.
• Claims involving accidental injury or damage to someone else’s property.

The most an insurer will pay is called the limit of indemnity. Some legal costs may count towards this limit, while other policies may treat them separately.

An insurance excess may apply, especially where another person’s property has been damaged.

What might not be covered?

Property owners’ liability is not the same as buildings insurance. It will not usually pay to repair damage to the insured owner’s building simply because damage has occurred.

Common exclusions may relate to:

• Injuries to employees.
• Deliberate or criminal acts.
• Motor vehicle liability.
• Asbestos, pollution or contamination.
• Contractual liabilities that would not otherwise exist.
• Fines and penalties.
• Properties or activities not listed on the policy.

Claims involving employees are usually handled under employers’ liability insurance rather than property owners’ liability. Most employers must hold this cover by law, subject to limited exemptions. GOV.UK explains the requirement and exemptions in Great Britain, while the Health and Safety Executive for Northern Ireland explains the Northern Ireland requirement.

Legal expenses cover is also separate and may cover different legal disputes.

Policies can include conditions about inspections, repairs, security, building work and unoccupied homes.

What should you check?

Check the policy wording and insurance schedule to confirm:

Which property and owner are insured.

Whether the cover is included or optional.

• The limit of indemnity.
• Any excesses or inner limits.
• Whether shared areas, land and outbuildings are included.
• Restrictions for empty properties or building work.
• Whether legal defence costs fall within the main limit.Give accurate information about the property, how it is used and who lives there. Check the policy to see which changes must be reported during the policy term.

How Got You Covered may be able to help

We arrange landlord insurance through insurers. Available options may include property owners’ liability alongside buildings cover and other landlord protection.

Cover, limits and acceptance depend on the insurer, the property and the full details provided. All cover is subject to the policy wording, schedule and insurer’s terms.