What is liability insurance?

However, the type and amount of coverage you need may vary depending on your circumstances. Here are a few examples to help you better understand.

You operate a home-based business

Did a client get injured while visiting your home? Has someone sued you after suffering a loss related to a product you sell? The liability coverage included in your home insurance policy only covers personal activities. You should therefore consider additional protection that also covers your business activities.

You drive in the United States

If you are injured in a motor vehicle accident, Québec’s automobile insurance plan will compensate you. Unfortunately, the same does not apply to non-Québec passengers in the other vehicle. In fact, the bodily injury or property damage they suffer may be covered by the liability protection included in your auto insurance policy. Make sure your coverage limits are adequate.

You own a swimming pool

Normally, damage caused to others or their property (such as a leaking pool that floods a neighbor’s yard) is covered by the liability portion of your home insurance. However, you may need an endorsement if you also want protection for damage to the pool itself, as well as related equipment such as a pool heater or spa, which are not always covered under a standard policy.

You have a dog

Did your dog bite a neighbor, dig up their flowerbeds, or attack their cat? In most cases, you are covered for this type of damage. However, you must inform your broker that you own a pet. In addition, if you failed to take reasonable precautions to prevent your animal from causing harm, you could be found negligent. In that case, your claim could be denied.

You travel outside the country

Your liability coverage travels with you—even when you’re abroad. So, if you accidentally injure someone while skiing down a mountain in the Swiss Alps, you could be protected. That said, make sure your coverage limit is sufficient. While many policies provide $1 million in liability coverage, $2 million is often recommended for greater peace of mind.

You volunteer

Volunteer activities are generally covered automatically under your home insurance policy’s liability protection. However, claims and lawsuits resulting from an incident can involve substantial amounts, making adequate coverage especially important.

You own a rental property

Property owners benefit from liability protection under their home insurance policies. However, if you own a rental property that you do not personally occupy, it may be wise to increase your coverage limits. Since you are not on-site regularly, it can be more difficult to spot maintenance issues—such as a loose step—or ensure that walkways and stairs are free of ice and other hazards.