What Is Personal Liability Insurance? Do You Need It?

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Protect your finances and property with personal liability insurance

Personal liability insurance is essential coverage all homeowners should have to protect their financial well-being. Most people don't think about getting sued when shopping for home insurance. They are focused on getting coverage to protect their property and personal belongings. But all it takes is one injury or accidental damage, and you could face a lawsuit. Personal liability insurance protects you in these situations. Compare quotes for personal legal liability coverage online, or call us. Keep reading to learn more about how you can save on your policy.

Key takeaways about personal liability insurance

Personal liability coverage provides financial and legal protection if you damage property or injure someone.
Coverage is included in your homeowners, condo, or renters policy.
It's recommended that you have at least a $1 million plan limit.

What is personal liability insurance?

Personal liability insurance protects you and your family against liability claims from injuries or damage to other people's property. Most importantly, it ensures you do not have to pay out of pocket if you are found legally liable. It is typically included in your homeowners or umbrella insurance policy.

Some insurers refer to this coverage as personal legal liability insurance or comprehensive personal liability (CPL) coverage.

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What does personal liability insurance cover?

Personal liability insurance provides you and your family with financial protection. This coverage protects you in two situations:

Third-party injury: Someone is injured on your property, and they sue you to cover their medical bills.
Property damage: If you or a family member cause damage to another person's property, you are responsible for paying for repairs or replacement.

Some insurers offer you a basic or comprehensive personal liability insurance policy.

How much personal liability home insurance do I need in Canada?

The amount of personal liability insurance you need depends on your financial situation. The standard is $1 million in coverage, but more homeowners are choosing a $2 million limit for additional protection.

Ideally, you should have enough liability coverage to cover your net worth. If your net worth exceeds $2 million, you can add an umbrella policy to increase your coverage.

How does personal liability insurance coverage work?

Personal liability coverage is typically included as part of your homeowner's policy. The same is true if you have condo insurance or renters insurance.

You can also purchase personal liability as a stand-alone policy. This is for individuals who don’t own property or rent.

Personal liability insurance examples

Personal liability coverage can protect you financially when mistakes and accidents happen. Here are some liability and property damage examples:

Liability examples

You forgot to shovel your driveway. A delivery driver slips and injures their back.
Your kids forgot to close the gate in the backyard. Your dog gets one and bites someone walking on the sidewalk.
You're hosting a party at your house. One of the guests trips on a wet floor, injuring their ankle.

In these situations, the injured party could take legal action against you to cover medical bills and other damages.

Property damage examples

You visit a friend's house and spill red wine on their white carpet. It's stained, and you need to replace it.
Your kids are playing at the neighbour's house. They accidentally break a window while playing hockey.

In these situations, your coverage can help pay for repairs or replacement.

How much does personal liability insurance cost?

There isn't a specific price for personal liability coverage. It's typically bundled within your homeowners' or renters' insurance policy. So, a portion of your premiums covers this type of protection. Factors like your insurance provider, policy type, coverages, endorsements, and plan limits all influence the price.

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Personal liability insurance FAQs

What are the benefits of personal liability insurance?

The main benefit of personal liability coverage is financial security. You can have peace of mind knowing that you’ll have protection if someone gets hurt on your property or you accidentally damage another person's property.

What is not covered by personal liability insurance?

There are a few situations where personal liability protection does not apply:

You intentionally cause damage to someone's property
You intentionally injure someone else
Damage or injuries occur because of business activities
Damage or injuries are a result of criminal or illegal activities

Does personal liability insurance apply when travelling?

Personal liability protection extends to when you are outside of your home. It applies if you cause property damage almost anywhere. For example, if you happen to do something while on vacation or when travelling, you can use your personal liability coverage to help cover legal fees, property replacement, settlement costs and more.

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Personal Liability Insurance

Get a personal legal liability insurance quote for free and save. Protect yourself and your financial well-being.

Compare personal liability insurance quotes from top providers

Protect your finances and property with personal liability insurance

Key takeaways about personal liability insurance

What is personal liability insurance?