What Could You be Liable For, as a Landlord?

One question that many new landlords ask is whether or not they are liable when a tenant suffers injuries or damages while living in the rental property. Others wonder if they need landlord insurance, or if their homeowner’s policy will cover them.

We’re not insurance experts, so if you have questions specific to your situation, consult your insurance agent. But we can offer some common-sense guidelines.

First of all, when you become a landlord and lease out your property, you take on more risks. In many states and cities, landlords are also held to certain rules regarding safety. So if a tenant falls down the stairs, for example, you could be liable for her injuries, depending on whether or not proper handrails, non-skid surfaces and other safety measures are in place.

If you have followed all the rules, the tenant’s personal insurance might cover her losses. But if not, she might try to seek retribution from you.

What about when a water pipe bursts and water leaks in your rental unit, soaking the carpet, damaging the ceiling below or soaking into the drywall? Water can do a lot of damage, as can fire. You need to protect your business and personal assets from the costs of rebuilding from fire, water and smoke damage.

These are three good reasons to have landlord insurance. A liability policy will protect you from damages. However, it’s important to realize—and tell your tenants—that your liability policy will not typically cover their possessions. They’ll need their own renter’s insurance for that coverage. Renter’s insurance will also cover tenants if they are negligent and cause injury or damages.

It’s a good idea to require tenants to have renter’s insurance.