Landlord Public Liability Insurance Explained

Landlord public liability insurance pays the bill if someone is injured or has their belongings damaged while they live in or visit a privately rented home. Slip and trip hazards, like loose carpets on the stairs or rugs on the floor, are among the most common dangers in a rented home, together with feeling poorly if the home suffers from damp or mould.

Settling a claim can cost thousands, while the risk of financial ruin can destroy a landlord’s life and letting business. For a few pounds a month, public liability insurance can offer landlords and their tenants financial peace of mind at a difficult time.

Why Landlords need public liability insurance

Two laws oblige landlords to keep their rented homes safe for tenants and their guests or other visitors.

  • The Defective Premises Act 1972 demands landlords take any action necessary to safeguard the health and wellbeing of tenants and anyone visiting a rented home.
  • The Homes (Fitness For Human Habitation) Act 2018 states landlords must ensure their properties are fit for tenants and their families to live in. The law covers several points, like installing carbon monoxide alarms, providing adequate heating and lighting and generally maintaining homes to a safe condition.

Breaking either of these laws can lead to a compensation claim covered by public liability insurance.

How serious is disrepair in buy to let homes?

Any hazard in a rented home is serious.

The latest data from the Ministry of Housing for 2019-20 says 23 per cent of private rented homes fail to meet the government’s Decent Homes Standard. By numbers, that means around one in four or 1.1 million private rented homes are substandard.

The statistics also reveal 13 per cent of private rented homes have a category one hazard under the Housing Health and Safety Rating System (HHSRS). Category one hazards range from damp to exposure to asbestos.

What’s covered by public liability insurance?

Check your public liability quote or policy for exact details of your cover.

A typical policy pays out for:

  • A landlord’s legal costs arising from a claim
  • Any compensation agreed or rewarded, including medical costs and loss of earnings.
  • The cost of replacing or repairing someone’s damaged belongings
  • Any legal costs or other claim charges agreed or awarded by a court.

The policy will not pay for any property repairs that led to the claim.

Public liability cover and disrepair problems

Failing to keep a rented home free from health and safety hazards is not covered by public liability insurance. But personal injury claims arising from the disrepair are.

The cover is not a legal requirement for landlords but does offer a financial safety net should the worst happen.

  • Disrepair involves inconvenience, loss or stress arising from a landlord failing to maintain a rented home in good condition. As well as this only a tenant can claim.
  • Public liability covers personal injury or damage to someone else’s property due to disrepair to a rented home.

Take a common complaint, such as dampness and condensation. By law, the landlord is responsible for dealing with the problem. This includes any liability for loss or damage to the tenant lies with the landlord.

However, accepting the liability for repairing the dampness allows the tenant and their family to claim compensation for damage to their property or respiratory illness caused by the damp.

What started as a disrepair problem has mushroomed into a claim for compensation from the family of four living at the property.

Importance of property inspections

A tenant does not have to report a disrepair issue to make a public liability claim. This shows the importance of regular property inspections.

The legal proof is merely showing the problem caused injury or damage and was the responsibility of the landlord to repair.

Checking a home every six months is likely to turn any issues before they grow into significant problems.

Keeping inspection records is essential. Note the date and time of the visit and any points raised. Ensure you ask the tenant if they have any maintenance issues to report.

These reports are valuable evidence if a claim arises.

Buying public liability insurance

Landlords can buy public liability cover as a standalone product or bundled with other property insurances.

When comparing prices, make sure the quotes are like-for-like as public liability terms vary between providers. Cover typically comes in three levels – £1 million, £5 million, and £10 million. How much cover you need depends on the property and if it is a buy to let, house in multiple occupation or furnished holiday let.

Don’t forget to take any no-claims discount if you are moving providers.

As a rough guide, expect to pay between £40 and £60 a year for public liability insurance for one or two buy to let properties.

Shopping for public liability insurance is simple as hundreds of providers offer cover.

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