Personal liability insurance explained simply

What is personal liability insurance?

Personal liability insurance is protection included in your home insurance coverage, whether you have homeowner insurance or renter insurance. It covers damages that you—or a family member living under your roof—may accidentally cause to another person or their property. It applies everywhere, in Canada and abroad, as part of your everyday life.

Good to know: There is also a personal liability clause in auto insurance policies. This liability insurance applies only to situations related to driving, owning, and using a vehicle.

What does your personal liability insurance cover?

Your insurance can step in in many situations, for example:

• You accidentally injure a skier, causing bodily injury.
• While travelling in Europe, you accidentally start a fire in a hotel room.
• Your dog bites a passerby and causes serious injuries.
• Your washing machine breaks and water leaks into the apartment below or next door.
• You accidentally break a valuable item at a friend’s home or spill red wine on their new carpet.
• A fire that starts in your home spreads to a neighbouring house.
• A visitor slips in your driveway and holds you responsible for their injury.
• Your son breaks a neighbour’s window while playing street hockey.

Your insurance company must also defend you at its own expense if you are sued for damages covered under your policy.

Exclusions and limitations of personal liability insurance

An omission or misrepresentation may result in a denied claim or partial compensation. That’s why it’s essential to answer your insurer’s questions accurately when requesting an insurance quote. Certain information—such as owning a dog or having prior lawsuits—must be disclosed.

Other situations are not covered, including:

• Damage caused intentionally or resulting from criminal acts.
• Injuries suffered by you or your family.

Good to know: Exclusions and conditions vary by insurer. Carefully review all clauses in your policy to understand exactly what is covered—and what isn’t.

Who is covered by your personal liability insurance?

Personal liability protection applies to you, your spouse or common-law partner, your children, and stepchildren living with you. The condition: you must be married or in a common-law relationship and have lived together for at least one year.

Check with your insurer for the specific terms of your policy—and always notify them of any changes.

Who is responsible for accidents caused by children in your care or by your teen?

It depends on the situation:

• If you are babysitting your grandchildren or young neighbours, you are responsible for personal injuries they may cause to others and for damage to property outside your home. Your personal liability insurance will compensate the affected person if it’s proven that you were negligent—for example, by failing to supervise properly.
• If your teenager babysits to earn pocket money, your liability insurance will also cover them if the child in their care damages property or injures someone.

How much liability coverage should you choose?

Most home insurance policies include $1 million in personal liability coverage. This may be insufficient in certain situations—such as when an accidental fire in your home causes major damage to neighbouring properties. Costs can quickly exceed that amount.

Tip: Talk to your insurance representative and, depending on your situation, consider increasing your coverage limits for better protection.

Learn more by listening to our podcast Sans détour Insuring my home for a million? Really? (In French only)

Will your personal liability insurance compensate a guest who slips on ice in your driveway?

Not necessarily. To be compensated, your visitor must:

• Prove your negligence: Did you clear snow and apply ice melt or sand? Did you warn them about icy areas?
• Prove the fall was unforeseeable: In Quebec, winter falls are often considered predictable.
• Prove that the broken leg directly resulted from the fall.

In some cases, your responsibility will not be engaged—especially if you took reasonable precautions.

Are you covered if you work from home?

Not without modifying your base policy. Standard home insurance does not cover the cost of damage related to business activities. If you work from home or are self-employed, inform your insurer and ask about work-from-home insurance or self-employed insurance. Without this disclosure, a claim involving a client or delivery person could be refused.

Pet liability and personal liability insurance: What coverage do you have?

As a pet owner or guardian, you are responsible for any damage your animal causes. Proper supervision is essential.

Your personal liability insurance will typically cover your legal defence and may also pay compensation if:

• Your dog injures a person or another animal.
• Your cat causes damage in a home you’re visiting.

This applies only if you previously informed your insurer about having a pet. Some dog breeds may be excluded from coverage.

Good to know: The law is strict with pet owners. It applies a strict liability regime, meaning an injured person does not need to prove that you made a mistake.

What if you’re having trouble getting insurance because of your pet?

You can contact a broker who will shop around with insurers specializing in higher-risk profiles. Reaching out to Infoinsurance is also a good option—their specialists provide free assistance.

Personal liability insurance: Your financial shield against the unexpected

Affordable and essential, personal liability insurance can help you avoid serious financial consequences. Review your coverage and adjust it as needed for complete peace of mind.