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FAQ: What is Personal Liability Coverage in Home Insurance?

Friday, 13 August 2021

Bob Ross used to say there are no mistakes, just happy accidents. But accidents can create a stressful and costly situation for you and your family – that’s the whole point of having reliable home insurance coverage. At BIG, we like to take the time to make sure you have exactly what you need to feel protected. When you start a quote, your broker will ask you about a personal liability limit – what is personal liability? What does it cover? How much should you get? We will be answering all your ‘burning questions’ about personal liability in this blog.

What is Personal Liability Coverage?

When you purchase any type of property insurance, whether home insurance, condo insurance, or tenant insurance, personal liability will be a part of it. When you or a household member is found to be responsible for bodily injury or property damage, personal liability coverage protects you financially from expenses that result from a lawsuit. Lawyers, legal fees, and payouts add up quickly, so this type of protection is a lifesaver, which is why it’s a must-have on your property insurance policy!  

Here are some common examples of personal liability claims include:

  • Slips and falls in icy conditions
  • Accidents involving pools
  • Tripping on loose carpets or items left on the floor
  • Injury to guests after serving them alcohol
  • Falling trees
  • Dog bites

What Does Personal Liability Insurance Cover? Bodily Injury

Personal liability coverage typically covers claims related to bodily harm that is caused to someone on your property.

Example: Say you have a visitor to your house during the winter months. There was a recent storm, and you didn’t have the chance to remove snow and ice from your entrance before they arrived. Then the unthinkable happens – your guest slips and ends up with several broken bones and internal injuries, and they are off work while they recover. If they decide to take legal action and sue you for negligence, personal liability coverage would likely cover legal costs and payouts if you were found liable, subject to your policy’s liability limit. 

What Does Personal Liability Insurance Cover? Property Damage

Personal liability coverage on your home insurance protects you against lawsuits if you’ve caused damage to another person’s property, whether at home or away.

Example: Imagine a windstorm takes place and a weaker tree in your yard falls on your neighbour’s home causing significant damage. Perhaps the tree should have been removed, but you’ve been too busy to take care of it. Should your neighbour choose to pursue you in a lawsuit for the damage to their property and you are found liable, personal liability coverage will kick in to cover legal costs and payouts. Coverage is always subject to your individual policy’s limits.

What Does Personal Liability Cover? Medical Fees

In an injury situation, the injured person might incur hefty out-of-pocket medical expenses due to the accident. When you are found partially or fully responsible for the accident causing them harm, personal liability coverage often pays the cost of any medical expenses.

What Does Personal Liability Insurance Cover? Legal Fees

If you end up having to go to court because of a claim, personal liability coverage often pays for the lawyer defending you in court. Additionally, your insurance provider may front the cost of any fines or payouts demanded by the court. Any fees and payouts would still be subject to your policy limit.

How much personal liability insurance do I need?

Legal fees, medical fees, and fines and payouts can snowball quickly into crippling debt. You don’t want something as simple as a tripping injury to hold you back from living your life. At BIG, we recommend our clients get a minimum of $1 million personal liability coverage on their property insurance policy to ensure they have a trusted amount to fall back on. If it works in your budget, you might consider increasing your limit to options up to $2 million to $5 million. Ask a BIG broker for their recommendation – we promise to always share sound and helpful advice.

Do I need Personal Liability on my home policy if I have it on my auto policy?

Yes. Personal liability coverage is still needed. Auto liability insurance is specific to car accidents. Auto liability only protects you when you are held legally liable for injury/death and property/vehicle damage in a car accident.


We hope you can see how important personal liability is in protecting your financial well-bring. When a BIG broker talks to you about personal liability coverage, know that they have your best interest in mind to save you from exorbitant legal fees and insurmountable debt. With a better understanding of how it works, a BIG broker can get you started on finding the right liability amount for you. Start your quote now!

By: Amy Legault