What Is a Private Liability Insurance? (And Why You Need One)
Living in society automatically puts you at risk of harming others accidentally. There are many instances where your actions could inadvertently injure somebody else, or damage their property.
While the circumstances vary, the law states that you are responsible financially if you harm somebody else. In this context, therefore, it is essential to have some form of coverage that protects you in the event somebody takes legal action against you.
What Is Private Liability Insurance?
Private liability insurance (sometimes called personal liability insurance) is a form of cover that protects you from compensation claims made against you by a third party.
Imagine the following scenario. Your children are playing ball games in the street and accidentally smash a neighbour’s window. The law states that you, as the parent, must pay the owner of the damaged property the money required to repair the damage.
In the case of a broken window, the payout is small. But there are many situations in which it could be much larger, especially if your negligence leads to serious injury.
Private liability insurance, therefore, might be essential for you. Just like the business equivalent – public liability insurance – it protects you during legal proceedings and provides you with cash if somebody makes a claim against you.
In the commercial realm, the role of liability insurance is clear. If you open a shop, for instance, and somebody slips on a wet floor, you’re liable for their injuries.
In the private situation, similar risks apply, though we don’t discuss them as often. A guest, for example, might injure themselves in your home and win a compensation claim against you, forcing you to pay out.
What Private Liability Covers
Here are some examples of the kinds of events that private liability covers:
- While you were on holiday, you dropped a lit cigarette behind the hotel sofa which then caused a fire. In this case, the owner might sue you for damages incurred.
- Your children were playing bat and ball in the street and accidentally broke a neighbour’s window. The neighbours may then claim that you are responsible for your children and that you should have controlled them better to prevent the damage to property.
- You invited a friend over who then slipped on your wet kitchen and hurt themselves. They might claim that you are responsible because you didn’t warn them ahead of time.
Private liability insurance, therefore, protects you against the grievances of third parties. Sometimes, insurers bundle it into another insurance package, such as home or travel insurance, but not always.
If your regular activities are high-risk, then you may want to buy it separately or add it to your existing cover.
Does Private Liability Insurance Apply At Work?
Generally, you do not need private liability for work. Your employer should have both public and employee liability insurance, covering harm caused to third parties by workers in the performance of their duties.
Personal liability claims are rare in the UK. However, legal action is much more common in the US, so you may consider it if you regularly travel across the Atlantic.