Liability insurance is insurance that will cover the costs of injuries or other losses that your tenants suffer due to the defective condition of the rental property or due to any other breach of your duty to a tenant. For example, if a tenant is assaulted on your property because you failed to take appropriate security measures and you are found liable for damages to the tenant, your insurance will pay out the damages.
As a landlord, you have many duties to your tenants. For example, you have to make repairs, inform tenants of lead dangers, and take steps to prevent crime. If you fail in any of these areas, you expose yourself to liability for injuries your tenants suffer. Because of this, you should seriously consider getting liability insurance.
The main difference is that liability insurance covers your liabilities to others, whereas other types of insurance cover damages to your property (e.g., fire insurance, flood insurance). In order to fully protect your property, your insurance policy should include liability insurance.
Liability insurance will usually also cover the costs of defending a personal injury case brought against you. The costs are mainly attorney’s fees.
Because landlord-tenant laws are constantly changing, your duties to your tenants are also changing. An experienced landlord-tenant lawyer can inform you of what duties you have to your tenants and help you determine just what your liability insurance package should cover.