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How Much Does Landlord Liability Insurance Cost?

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Landlord liability insurance is a relatively cheap form of protection. When bought independently, landlord liability insurance costs start from around £50 – £55 a year for a policy with £2 million of coverage (Read more here).

Policies with a higher limit of insurance would cost a bit more. For example, a policy with £5 million of coverage would cost more than a policy with a £2 million limit of liability. However, each additional £1 million of cover is usually cheaper than the first £1 million of protection. That means getting a policy with higher coverage can be more affordable than you might think.

However, landlord liability is often sold in a bundle with landlord building insurance as part of a landlord insurance package. This package can also include extras like contents insurance. When landlord coverages are purchased as a package, insurers often offer discounts. This is one way to secure a cheaper premium for landlord public liability insurance.

Combined landlord building and liability insurance start from around £200 a year for a typical property at the low end, but premiums can be quite variable. Building insurance quotes depend on the rebuild cost (because in a worst-case event like a fire, the insurer would have to pay to demolish and rebuild the property). As a result, rented properties with a higher rebuild cost will cost more to insure for a landlord.

What does landlord insurance cover?

Landlord liability insurance is a form of public liability insurance. As such, it covers situations where a third party (e.g. tenant or visitor to the property) is injured, or their property is damaged, and the cause is the landlord’s negligence.

For example, if someone trips over a piece of loose carpet and falls, injuring themselves. They could claim it was the landlord’s negligence for not providing a safe environment and ensuring the carpet was secured properly.

Landlord building insurance usually covers loss or damage due to specified disasters like fire, flood, explosion and burglary. However, the exact events covered can vary from policy to policy. Building insurance protects the main structure, including plumbing, electrics and built-in electrics.

Contents insurance, which protects items like furniture, furnishings and removable appliances in case of similar disasters, is frequently subject to an extra premium depending on the level of protection needed. For example, £100,000 of contents cover would cost more than £50,000 of protection. Landlord contents insurance doesn’t cover the tenant’s, so they need to buy their own contents insurance.

Other insurances that may be added to landlord insurance can protect against things like non-payment of rent or wilful or accidental damage to the property. Policies can also be added that protect empty properties from harm from things like fire or flooding. Cover can also be obtained to shield from malicious damage due to break-ins or vandalism.

A landlord insurance package provides the advantage of holding all insurances under one main policy, eliminating the need for tracking several different monthly premium payments. It also provides the benefit of renewing everything at the same time as everything is held under one umbrella policy.

The cost of empty property coverage is often higher as the risk of damage from fire or water may be undiscovered for a longer period in empty properties. As a result, the damage can be worse in an empty building than in an occupied building.

Who pays landlord liability insurance?

The property owner, in this case, the landlord, usually pays landlord liability insurance. This cover is meant to protect the landlord financially if someone is injured and it’s the landlord’s fault. As a result, it’s the landlord who would pay the premiums.

While the landlord for residential properties pays for landlord liability insurance and landlord building insurance, this is a bit different for commercial properties. Commercial property leases may stipulate that the tenant pays the buildings insurance through their rental payments.

Do landlords have to have public liability insurance?

There is no legal requirement for landlords to obtain liability insurance. However, the risk of potential lawsuits from tenants or other third parties is not insignificant for landlords. So even though the law does not insist that landlords purchase public liability protection, it makes sound financial sense.

There can be a higher risk of legal action for those landlords that rent multiple properties, but whether one or several buildings are owned, it is important to have the proper insurance. Having adequate protection in place will limit the expense and financial obligation associated with successful claims and protect the landlord’s personal finances and assets.

Also, landlord insurance is a requirement for any property purchased using a buy-to-let mortgage, as mortgage providers will insist that their asset is covered.

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