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RENTAL PROPERTY LIABILITY INSURANCE

Rental property liability insurance is important coverage for both landlords and tenants. It provides financial protection for the parties on either side of a lease, from most risks related to the ownership, operation, or maintenance, of a property.

An owner has a responsibility to ensure the safety of all persons on the premises, and this responsibility is ordinarily discharged with the maintenance of standard safety protocols. When an owner leases a building to another, the leaseholder also acquires responsibilities to ensure that the premises are maintained in a manner not risky to the safety and security of others. Uncontrollable events and accidents occur, however, and sometimes people get injured. Fortunately, both the owner and the lessee can mitigate many of the negative outcomes possible from such an event by ensuring that rental property liability insurance coverage is in effect.  Therefore, it is important for all tenants to find out more about rental insurance rates and get quotes on a policy.

Owner and Tenant Coverage

The property owner can be held liable for injuries if he or she fails to maintain the apartment, condo, house, loft, or commercial space in such a way that it is safe for tenants and visitors, and in the absence of rental property liability insurance, could suffer a financial loss. Injuries could be due to defective structures, or might be due to the normal effects of wear and tear that might have gone unnoticed. Injuries might be sustained as a result of some environmental hazard or because of criminal activity, a violent burglary, perhaps. These would not have been either intended, invited, or foreseen, but because they occur on the premises, the owner could be considered in some way liable. Rental property liability insurance could cover these.

If these events happen on the premises of a rental property such as a condominium or townhouse, the leaseholder could also be held liable. If they occur, for example, in an off campus apartment rented by a student, and the guest of that student were the victim, the landlord might be held liable if the incident occurred in the hallway of the building. If, however, it occurred in the apartment or condo unit, the student might very well be the party held liable, and the rental property liability insurance of the student would take care of this. There are circumstances, however, where the liability might be difficult to determine clearly.

If the accident was a burglary, for example, and it did occur in the rental unit, the liability might lie with the tenant because it occurred in the private spaces of the home. If the landlord had, some time before, been advised that the hinges on a window were broken and had been slow in repairing it, and if the burglar had entered the apartment through that window, the financial responsibility might be the landlord's. A good rental property liability insurance policy would provide financial relief in either instance.

Liability Coverage Policies

An owner can purchase rental property liability insurance for financial protection against the risks characteristic of a rental, which are somewhat different from those associated with owner occupied properties. Indeed, this should always be the case. The lease agreement will define which responsibilities remain with the owner and which ones transfer to the renter, be it a senior citizen or a new family, for the duration of the lease.

Liability insurance is often referred to as third party insurance. In third party insurance, any premium paid for damages or injury are paid not to the person insured, but to the person who was injured or who suffered a loss. This other person is the third party.

Liability coverage whether on a rental or owner occupied building, does not cover intentional damage. If a person, in the act of committing a crime, willfully damages the building or causes injury to a guest of the occupant of the home, the rental property liability insurance in the tenants policy will cover that. This is the malicious damage clause, or the coverage for criminal activity. However, financial compensation will not be paid to the owner if it can be shown that damage was intentional and willful, and that it was perpetrated by the owner. If the damage is within the private spaces of the rental home and it was the tenant did willfully cause that damage, no compensation will be paid to the tenant from the tenant's rental property insurance policy.

Standard liability insurance will also not generally cover contractors working on a property. Persons contracted to carry out activities of work on the property will carry their own injury insurance since they are actually on a job and therefore, would be covered by the workmen's compensation agreements that they carry. If a serious accident befalls one of the contractors while on the premises and it can be shown that it was the result of some avoidable cause that was the owner's or tenant's responsibility, a claim could be filed against the rental property liability insurance of either one.