Many homeowners’ insurance claims are liability losses. They can result in payouts of a few million dollars. If someone gets hurt on your property, or if you cause damage to someone else’s property, you may be liable for medical bills, legal fees, rehabilitation, and many other expenses. You can protect yourself against this risk by purchasing a personal liability policy. The policy will cover your legal expenses if you are sued.
What Is Personal Liability Insurance?
A personal liability policy protects you and your family from liability if you cause physical injury to a third party or cause damage to their property. In addition, the personal liability coverage compensates you for the legal fees and damages you owe. Several factors affect the type of liability insurance you need, including your employment status, industry, and the country in which you live. It is relatively uncommon in Malaysia to take out personal liability insurance as a separate policy, but it is common to include it in insurance packages. However, given the wide range of coverage available, it can be tough to understand which type of liability insurance you need.
What Does Personal Liability Insurance Cover?
A personal liability policy will protect you in a wide range of situations where you may be legally required to pay for something that happens to someone else on your property or, in some cases, on someone else’s property. Among the most common liability claims are the following:
- Expenses resulting from an injury sustained by a guest at your home
- Litigation seeking compensation for damages that the policy may cover
- Damages to persons or property resulting from your negligent acts or omissions
- Damage to property or bodily injury caused by your pets
What Isn’t Covered In Personal Liability Insurance?
Your homeowners’ insurance will cover some specific personal liability claims. A few common examples include:
- Liability due to a car accident: your auto insurance policy typically covers these claims.
- Injury or damage to property by you or a family member
- Damages or injuries within the household
- Any bodily injury or property damage can be attributed to your professional activities or any business you conduct. A business insurance policy should cover any business-related claim.
Is It Necessary To Have Personal Liability Insurance At Work?
If an accident occurs at work while performing your duties, your business’s insurance policy should cover the costs. You should check if your employer has public liability insurance, which will compensate you for any damage to a third party caused by accident caused by a member of the organization while at work. To protect you personally under similar circumstances as a self-employed person, you must have self-employed public liability insurance.
How Personal Liability Insurance Work
Assume that your homeowners’ insurance offers RM300,000 in personal liability coverage. In addition, you have a personal umbrella insurance policy that covers up to RM1 million. The plaintiffs sue you for RM800,000 for a covered incident, and you lose. The first thing you’ll have to do is pay your homeowners’ insurance deductible, say RM1,000. Next, your homeowners’ insurance will spend the next RM299,000 of the judgment, bringing you up to the RM300,000 limit. You will then have to pay RM500,000 from your umbrella policy. However, due to your high level of comprehensive personal liability coverage, you won’t have to pay that half-million out of your assets.
Feel free to contact Fincrew Insurance today if you have any concerns about the level of cover provided by your policy. We also offer a range of commercial insurance policies available for viewing online today.