Homeowners Insurance - Premises Liability Insurance

Premises liability coverage is the term for the insurance that protects you and your assets in the event that you face a lawsuit arising from an injury sustained on your property. Part of standard homeowners insurance, premises liability coverage pays for your legal defense if you are sued by a person injured in or around your home. It may pay for damages that are awarded as well. If a visitor to your home is injured through their own carelessness, their lawsuits normally do not succeed. However, if a person is injured due to carelessness or negligence on your part, then you might be liable for damages.

For example, let’s say that you decide to replace a damaged plank in a deck on the side of your home. You remove the plank and take it to your garage to mark the replacement for cutting, but you are interrupted before you finish the job. You let your family know there is a missing plank on the deck, but you do not mark the area with caution tape or safety signage. That evening, a stranger stops by and decides to seek entry from the deck instead of the entry door. Unaware of the missing plank, the visitor steps into the opening. He sustains serious injuries to his knee and back.

In this scenario, the visitor has grounds for lawsuit because you failed to maintain a safe property. He had a reasonable expectation that he was walking on a safe, level surface. Your removal of the plank and your failure to mark the danger amounts to negligence. If you have homeowner insurance, your insurer will pay for your defense and for any losses arising from the claim.

Things could get complicated, however, if the injured party claims the injuries were sustained as the result of an intentional action on your part. In the example above, you intended to replace the plank, but your good intentions would not prevent the visitor from at least alleging not only negligence, but also intentional action. Most home owner insurance excludes intentional actions from their premises liability coverage. For example, if you lay a booby trap for trespassers or burglars, injuries caused by your actions would be excluded from coverage. Your insurer would be required to mount a defense in your behalf, but it could issue a letter stating that it does not agree to pay for damages arising from actions excluded by the policy. If the litigant convinced the court that you removed the plank to protect your home against burglars, you would have to pay those damages yourself.

As with all insurance, you must read your policy carefully to understand what it covers and what it excludes. If, after reviewing your policy, you still have questions about your premises liability coverage, ask your agent. You might have special circumstances that require a rider to guarantee that you are covered against liability claims. Considering that a fair-sized injury loss could wipe out some or all of your savings and/or home equity, you should make sure that your property is well maintained and that your premises liability coverage is thorough.