One of the most valuable – and overlooked – benefits of homeowners and renter insurance is liability coverage. It protects you if someone gets hurt on your property, you accidentally damage someone else's property and sometimes if you're deemed responsible for injuries far from home. Insurance also can pay legal defense costs if you're sued.
Surprisingly ordinary things can increase your risk of a lawsuit:
You hire help around the house. Whether or not workers in your home (housekeepers, roof cleaners, etc.) are covered by workers' compensation insurance through their employers, you could be sued if they're injured on your property through what they believe is your negligence. That might include common hazards like loose steps or a hole in the yard that you didn't repair.
You're the "activities coordinator" in your social circle. Say, for example, you set up a white-water rafting trip for some friends, strictly for fun, where someone is seriously injured. If the injured person contends that, as the trip organizer, you should have known about the danger, you could end up in court.
You own a dog. About one-third of all homeowner's liability claims arise from dog bites, with an average payout of $39,017 in 2018 (the latest data we have available from the Insurance Information Institute). Children, by far, are the most frequent victims, followed by the elderly. The American Veterinary Medical Association offers these tips to prevent dog bites.
You have sickly trees in your yard. If you know or should know that a tree is rotten, diseased or dying, you're obligated to remove it as a potential hazard. If you don't and it crashes onto a neighbor's house or car, you could be held responsible. (Healthy trees that fall with no warning, like during a windstorm, are an exception.)
You entertain guests in your home. Your just-mopped tile floor. Icy front steps. Accent rugs. That open dishwasher door. All can lead to serious falls and, potentially, an injured visitor who may feel that the accident could have been prevented if only you'd have taken care of the problem or at least warned them.
And if you serve alcohol to guests? You could have additional liability concerns, particularly if underage drinking is involved.
If you're unsure how much liability protection you have, log in to your PEMCO online account, call 800-GO-PEMCO, or talk with your local PEMCO agent. If you think your limits may be too low, get the details on umbrella protection – an extra $1 million or more, starting at around $200 a year.