Accidents can happen to anyone, at any time. In some cases, these unexpected incidents can lead to costly claims. Personal liability insurance is designed to protect you from the financial fallout of such events if you’re held responsible.
Because BizCover specialises in business insurance, we do not sell personal liability coverage. However, as Australia’s number one online business insurance service, we do know a thing or two about insurance in general. This article should help you get a better understanding of what personal liability insurance is and why you might wish to consider it.
What is personal liability coverage?
Personal liability insurance is a type of cover that protects you if you’re found legally responsible for accidentally causing injury to someone else or damaging their property. In simple terms, it helps cover the financial fallout if something goes wrong and you’re held liable.
In Australia, personal liability cover is usually included as part of a home and contents insurance policy, though it can sometimes be purchased as a standalone option. It’s designed to cover everyday scenarios like a guest slipping and injuring themselves in your home, your child accidentally kicking a soccer ball through a neighbour’s window, or your pet causing injury to another person.
People often choose to take out personal liability insurance because it can help to cover legal fees, compensation or repair costs if you’re found liable. Otherwise, those funds would be coming out of your own pocket.
What is Public Liability insurance vs. personal liability insurance?
Personal liability insurance is different to Public Liability insurance in that it helps cover private individuals. Whereas Public Liability insurance is a type of cover that is designed to protect businesses from claims that their negligent business activities caused a third-party injury or property damage. This is why Public Liability insurance is sometimes also referred to as “slips, trips and falls” insurance. It’s commonly purchased by business owners that have a lot of interactions with face-to-face clients, work onsite or manage events and functions.
What is general liability insurance vs. personal liability insurance?
Like Public Liability insurance, general liability insurance is typically designed for businesses instead of private individuals.
General liability insurance is essentially designed to cover claims from third parties due to property damage or bodily injury caused by a business’s negligent operations. BizCover does not offer general liability insurance, but most policies tend to also include personal injury cover.
In short, both Public Liability insurance and general liability insurance are designed for businesses, while personal liability insurance is designed for individuals.
What does personal liability cover?
Personal liability insurance is designed to protect you financially if an accident in your personal life leads to injury or damage that you’re found responsible for. While exact coverage depends on your policy, most Australian insurers include the following areas:
Bodily injury to a third party
If someone is accidentally injured on your property or as a result of your actions, personal liability insurance can help cover their medical costs or compensation. For example, a guest could slip on a wet floor in your kitchen, or your dog might knock over a visitor and cause them to injure themselves.
Property damage to others
This cover helps if you accidentally damage someone else’s belongings. Everyday mishaps happen (like an errant cricket ball hitting a neighbour’s car). Instead of paying for repairs or replacements yourself, your insurance may step in.
Legal expenses
Defending yourself against a liability claim can be costly. Personal liability insurance often includes cover for legal fees, court costs, and settlements if someone decides to take action against you. This ensures you don’t have to shoulder the financial burden of legal bills on your own.
Common exclusions and limits
It’s important to know that personal liability policies typically don’t cover intentional acts, business activities, or damage caused by motor vehicles (which is usually covered under car insurance). Policies also have coverage limits, which can vary depending on your insurer, so checking the fine print is important.
Who needs personal liability cover?
Personal liability insurance can be a valuable thing to have in your back pocket should you unexpectedly be hit with a liability claim. Accidents are unpredictable, and even a small mishap can result in expensive claims. That said, there are certain groups of people who may find this cover especially useful.
Homeowners and renters
Whether you own or rent, accidents can happen on your property. From a delivery person tripping on your front step to a guest injuring themselves at a dinner party, personal liability cover helps protect you from unexpected claims.
People with pets
Pets can be unpredictable, even the most well-behaved ones. A dog that bites a visitor, or a cat that damages a neighbour’s brand-new outdoor furniture setting, could leave you facing a claim for medical costs or repairs. Personal liability cover helps soften the financial blow of these potential scenarios.
Parents of young children
Kids are naturally curious and also sometimes a little clumsy. A footy through a neighbour’s window, spilled juice on an expensive carpet, or a tumble that injures a visiting guest are all examples of how children can accidentally cause damage or injury. Personal liability insurance can help provide peace of mind for parents.
Evaluating your personal risk
Think about your day-to-day activities, your living situation, and the people or pets around you. If an accident happened tomorrow, would you be financially comfortable covering medical bills, repair costs or legal fees out of pocket? Personal liability cover is designed to prevent these “what if” cases from turning into nasty, costly surprises.
How to choose the right personal liability cover in 4 steps
Choosing the right personal liability insurance doesn’t have to be complicated. But it does require careful consideration. Here are a few steps to help guide you:
- Review your existing policies: Before taking out new cover, check your current home, contents or renters’ insurance policies. Some may already include some level of personal liability protection; however, the limits may not be adequate for your needs.
2. Consider your lifestyle and risk factors: Think about the situations that apply to you. Do you have children or pets? Do you host gatherings regularly, or own a pool or trampoline? These lifestyle factors could increase your exposure to liability and influence how much cover you may need.
3. Compare limits and exclusions: Take the time to review the coverage limits and exclusions carefully. For example, some policies may exclude incidents involving certain breeds of pets, risky activities or high-value claims.
4. Seek expert advice: If you’re unsure about the right level of protection, it’s worth speaking with an insurance expert. They can help assess your risk, explain policy details, and recommend coverage that suits your specific circumstances.
Personal liability insurance – a safety net for everyday life
Personal liability insurance can help protect you from the unexpected financial strain that can follow accidents or claims. From everyday mishaps at home to unforeseen incidents involving pets, children or guests, it offers peace of mind knowing you won’t be left out of pocket.
Looking for business insurance options instead? Get multiple quotes from leading Australian insurers online with BizCover. It only takes a few minutes.
