Why personal liability insurance can keep you out of trouble

The pizza delivery man fell down your front steps. Your poodle bites your daughter’s friend. You left a stove burner on and it caused a fire that destroyed part of the building where you live. These are three very realistic situations where you could be sued. If you don’t have personal liability insurance, that kind of lawsuit could cost you.

Civil liability law works on the premise that we all have a duty not to harm others. As a citizen, you have an obligation to do whatever it takes to avoid causing unlawful injury to other people or their property.

However, it may happen that the damage you caused was involuntary. You probably didn’t want the dog to bite your daughter’s boyfriend, right? When the injury is your responsibility but the situation is not the result of a malicious or willful act, your liability insurance will compensate the victim if there is a lawsuit. That means you can sleep soundly. Your third-party liability insurance will keep you from having to pay out of your own pocket.

When you purchase insurance to protect your home from fire, theft, vandalism or other disasters, you also obtain liability insurance; it is part of a home insurance policy. It covers any injury that you or your family may inadvertently cause to someone in the home. Ask your insurance broker to explain the details of your policy.

Most insurance policies provide liability coverage for one to two million dollars. It might sound like a lot, but in some cases such an amount may not even be enough. If you want additional protection, your insurer can advise you about the products available in a higher range. Be sure to check exactly which kinds of damage are covered and for how much. Are you the owner of a large dog? Would any property damage or personal injury caused by your mastiff be sufficiently covered by your policy?

You live in a tiny studio apartment? Your furniture is all hand-me-downs that aren’t worth much? You might think you don’t need home insurance, but don’t decide until you consider all the angles. Here are three questions to ask yourself:

• If a fire destroys my property, could I afford to buy all new furnishings?
• If I were found responsible for a fire in my building, could I cover the repair costs? Would I be able to compensate neighbours for their property losses?
• If I’m playing road hockey and I shoot the puck straight into someone’s face, could I afford to pay for his teeth repairs?

In the end, you may just find that for a few dollars a month, personal liability insurance is worth a lot of peace of mind.