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Landlord liability insurance is a coverage type typically included in a standard landlord insurance policy and is essential for protecting your finances if a tenant or visitor files a claim against you.
Understanding how landlord liability coverage works and how much it costs can help protect your investment and prevent out-of-pocket legal expenses. In this guide, we’ll break down what it covers and doesn’t and how pricing works across different states.
Why Do Landlords Need Liability Insurance?
Liability insurance protects landlords from paying out of pocket if someone gets hurt on the property or if they’re blamed for property damage. Accidents like a broken step or loose railing can lead to lawsuits, even if unintentional.
With the right coverage, legal fees, medical costs, and settlements are handled by the insurer, saving landlords from financial stress. It’s a must-have for anyone renting out property, whether it’s a single home or multiple units.
How Much Does Landlord Liability Insurance Cost?
Landlord liability insurance at Obie typically costs around $150 to $1,000 per year, depending on your property's size, location, claim history, and how much coverage you choose. Most policies include $100,000 to $1 million in liability protection.
Liability coverage is automatically included in a DP-3 policy, which offers the most comprehensive protection. However, if you have a DP-1 or DP-2 policy, you'll need to add liability coverage separately, which can affect the final cost based on coverage limits and whether the policy is basic (named peril) or broader (broad form). Bundling liability with your landlord insurance often results in better value.
Property Damage vs Liability Coverage
Understanding the difference between property damage and liability coverage is key to protecting your rental investment:
In short: property damage covers your building, while liability covers legal risks from others getting hurt or filing claims. Both are essential parts of a landlord insurance policy.
What Does Landlord Liability Insurance Cover?
Landlord liability insurance covers legal and medical costs if a tenant, guest, or third party is injured on your rental property or if you’re found responsible for damaging someone else’s property. Common examples include:
- Slip and fall injuries on walkways or stairs
- Accidents caused by faulty repairs or maintenance
- Property damage to a neighbor’s home (e.g., a leaking pipe flooding another unit)
- Legal defense costs and settlements if you’re sued
It acts as a financial shield, helping you avoid paying out-of-pocket for claims related to accidents or negligence.
Common Exclusions in Landlord Liability Insurance
While landlord liability insurance covers many legal risks, there are specific situations it won’t cover. Common exclusions include:
- Intentional damage caused by the landlord
- Maintenance-related issues if negligence is proven (e.g., ignored repairs)
- Tenant property damage (covered under renters insurance, not liability)
- Illegal activity happening on the property
- Injuries to the landlord or their employees (typically covered by workers’ comp)
Always review your policy to understand what’s excluded and whether you need additional coverage.
Is All Landlord Insurance Liability the Same in All States?
No, landlord liability insurance is not the same in all states. While the basic purpose—protecting you from legal and medical costs—is similar, coverage requirements, limits, and pricing can vary based on state laws, weather risks, and local litigation trends.
For example, states prone to natural disasters or with higher tenant protections may have stricter requirements or higher premiums. Some insurers also offer state-specific endorsements or exclusions, so it’s important to review your policy and make sure it meets your state’s standards and your property’s risk level.
Protect Your Rental with Smart Liability Coverage
Don’t leave your rental property exposed to costly lawsuits and accidents. Obie’s landlord insurance includes powerful liability protection tailored for real estate investors. With competitive rates, easy online quotes, and no unnecessary paperwork, Obie makes it simple to get covered fast. Whether you own one unit or a full portfolio, Obie helps you stay protected without overpaying.
Get your free quote today and protect what matters most.
FAQs About Landlord Insurance Liability
Can I be sued as a landlord without liability insurance?
Yes, and without insurance, you’ll have to cover legal and settlement costs out of pocket.
Who is responsible if a tenant gets injured on my property?
If the injury was due to unsafe conditions or negligence, the landlord is typically held responsible.
Do I need landlord insurance for one rental property?
Yes. Even one property carries legal and financial risks that landlord insurance can help cover.
Does landlord insurance cover tenant damage?
It covers accidental damage to the property, but not intentional damage caused by tenants.
How much landlord liability insurance do I need?
Most landlords carry between $100,000 and $1 million in liability coverage, depending on risk level.
Does landlord liability insurance cover legal fees?
Yes, it covers attorney fees, court costs, and settlements related to covered claims.
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