Personal Liability Insurance: A Comprehensive Details

Personal liability insurance covers claims made against you by others for injuries or damages. Public liability insurance, its commercial counterpart, protects your business from similar claims made by third parties.

Key Takeaways

  • Personal liability insurance helps cover costs if you accidentally hurt someone or damage their property. 
  • It’s often included in home insurance but can be bought on its own. 
  • Umbrella insurance offers extra coverage after your main policy runs out.

What Is Personal Liability Insurance?

Personal liability insurance, or “CPL insurance,” is part of home or umbrella policies. It shields you and your household from costs stemming from injuries or damages you might accidentally cause to others. This ensures you don’t pay hefty amounts if you’re deemed legally accountable for harm to someone else.

What Does Personal Liability Insurance Cover?

Personal liability home insurance covers accidental injuries or property damage caused by you, household members, or pets, ensuring protection and peace of mind.

Personal Liability Insurance: A Comprehensive Details

Injuries you and your family cause away from home

Personal liability home insurance protects you and your family against injuries caused to others, even outside the home. To be more specific, it covers medical bills and legal costs from incidents like accidental injuries at the park, up to your policy limit.

Injuries on your property

Personal liability insurance protects you if someone is injured on your premises, whether from a trip on your walkway or an object falling from your wall onto a guest.

Injuries caused by your pet

The insurance can cover injuries caused by your pet, like if your dog jumps on a guest or bites someone. However, some insurance companies exclude specific dog breeds, affecting coverage or policy availability.

Damage caused by someone in your household

Accidental property damage you or your family cause to others is covered under personal liability. For example, if your child breaks a neighbor’s window while playing baseball in the yard, personal liability covers the damage up to your policy limit.

What Doesn’t It Cover?

Before getting homeowners or renters insurance, always check the details to see what isn’t covered. Common exclusions include:

  • Auto accidents you cause, typically covered by car insurance.
  • Injuries to you or household members, usually covered by health insurance.
  • Harm or damage you cause on purpose.
  • Issues related to your job or running a business from home.

How The Insurance Policies Work Together

Suppose you have a homeowners insurance with a $300,000 personal liability limit and an umbrella policy with a $1 million limit. If you’re sued for $800,000 and lose, here’s how it works:

How The Insurance Policies Work Together

You pay the $1,000 deductible first. Next, your homeowners insurance covers $299,000, reaching its $300,000 cap. Finally, your umbrella policy handles the leftover $500,000. This setup ensures you’re not digging into your personal savings for that large amount, all thanks to your ample liability coverage.

How Much Personal Liability Insurance Do I Need?

This insurance protects your assets if faced with a lawsuit. This includes real estate, vehicles, savings, investments, and valuables like art or jewelry. Regularly assess the value of your assets to decide your coverage needs.

For instance, if you have $100,000 in coverage but $250,000 in assets, and you’re sued for $225,000, you’ll have to pay the $125,000 difference yourself.

Most home insurance starts with $100,000 in liability coverage. You can increase this to $300,000 or $500,000, but usually, it maxes out at $500,000. For greater protection, consider umbrella insurance.

How Much Is Personal Liability Insurance?

Personal liability insurance is typically included in homeowners policies. According to a 2018 report by the National Association of Insurance Commissioners, the average yearly cost was $1,249 for homeowners and $179 for renters.

Moreover, the price varies based on factors like location, deductible, coverage amount, and others. Your credit score can affect the cost, and bundling it with other policies, like auto insurance, might save you money.

How Much Is Personal Liability Insurance?

Protect Yourself With Personal Liability Insurance

This insurance is vital for those aiming to safeguard their assets from unforeseen accidents. It covers damages, injuries, and legal costs if you’re responsible. For inquiries or more details about your coverage choices, contact the C&S agents. So we’ll guide you to a suitable policy for your needs and budget. Ensure your protection today with personal liability insurance.

Do Renters Need The Insurance?

Personal liability insurance for renters mirrors homeowners’ policies regarding coverage scope. It guards your assets if a visitor incurs injury at your place or if you inadvertently damage someone’s property. Moreover, it assists with legal expenses from such incidents. Coverage usually begins at $100,000, adjustable based on your insurer’s options.

What’s the Difference Between Personal Liability and Property Liability? 

Below is a table comparison highlighting the differences between personal liability and property liability:

AspectPersonal LiabilityProperty Liability
DefinitionCoverage against claims due to injuries or damage you cause to other people.Coverage against claims for damage you cause to another person’s property.
Coverage Examples1. Bodily injuries you cause to others. <br>2. Emotional distress or defamation claims against you.1. Damaging a neighbor’s fence with your car. <br>2. Your child breaking a neighbor’s window while playing.
Typical PoliciesOften included in homeowners, renters, and auto insurance policies.Typically bundled with personal liability in many insurance policies, like homeowners or auto.
PurposeTo protect you from legal expenses and claims for injuries you caused to others.To protect you from legal expenses and claims for physical damages to another’s property caused by you or a family member.

Personal Liability Coverage: FAQs

Does homeowners insurance cover personal injury?
Homeowners insurance
usually includes personal injury coverage. So, based on your property’s risk factors, an umbrella policy could offer added personal liability protection.

Is personal liability the same as umbrella?
The insurance, often part of homeowners or auto policies, offers liability coverage. In contrast, umbrella insurance is a distinct policy providing extra liability protection.

Why do you need liability insurance?

Liability insurance is crucial because it shields you when you are deemed responsible for harming someone or damaging their property. Moreover if sued, this insurance covers the associated costs and legal fees

Is liability insurance full coverage?

Liability insurance isn’t “full coverage” as it doesn’t cover your vehicle’s damages or your personal injuries from accidents. Moreover, full coverage typically encompasses liability, collision, and comprehensive coverages.

The Bottom Line

Personal liability insurance safeguards you from significant out-of-pocket expenses if you’re liable for someone else’s injury or property damage. While included in some homeowners policies, it’s also available as a separate policy.

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