Unless you’re a hermit who never invites anyone to your home, you open yourself up to potential liability every time someone who doesn’t live in your household pays you a visit. From your mother-in-law to the UPS delivery guy, when someone else sets foot on your property, you could be liable if they’re injured, whether you did anything to cause the injury or not. The injured person could sue and charge you with negligence and seek payment for medical bills, lost wages or pain and suffering. A lawsuit isn’t inevitable, but it’s a possibility you should be prepared for.
Though you should do your best to keep your home free of obvious hazards such as wandering pet alligators and gaping holes in the floor, you can’t always account for casual hazards such as water dripping on the floor or a rug slipping out from under someone. Even the best-behaved dogs might bite when provoked, that antique chair might collapse when your 300-pound uncle takes a seat and you can’t predict people’s own clumsiness.
Your first response when someone is injured in your home should be to render aid. Whether this means calling an ambulance or supplying an ice pack, you should do so. Expressing concern for the injured person is great, but don’t admit fault. If a lawsuit should develop, anything you say can and may be held against you. Even if you feel responsible, such as your dog biting a friend’s toddler, and intend to pay medical bills, don’t make the offer in the heat of the moment.
If you have homeowner’s insurance, part of that insurance covers your liability if someone is injured at your home. Liability levels start at $100,000. That amount won’t go far if someone needs major surgery or sues you for pain and suffering, so you may want to ask your insurance agent about increasing that amount to $300,000 or even $500,000. The insurance should pay medical bills if someone is injured.
An umbrella policy picks up where your homeowner’s liability leaves off. For this reason, it’s sometimes known as excess liability coverage. Umbrella policies cover your liability not just at home, but in your cars, vacation home and other property you may own. You can purchase an umbrella policy for $1 million or $2 million for less than $100 in additional premium costs on most homeowner’s policies. Umbrella policies protect you from large lawsuits that, if you lose, could wipe out your finances. Some policies will pay to defend you from such a lawsuit.
Every policy differs in the things it covers and the amounts it will pay. If you own a swimming pool, for instance, your homeowner’s policy may require you to fence the pool and even install alarms. Otherwise, the policy might not pay a claim involving the pool. Some policies won’t pay up if you own certain breeds of dogs, or a company may cancel your policy if your dog has bitten someone before. The liability insurance attached to your homeowner’s policy doesn’t cover someone who works for you, such as a contractor or housekeeper; before you hire someone, verify that they have their own insurance. The insurance also doesn’t cover deliberate acts that result in injuries, such as you breaking your belligerent neighbor’s nose when he criticizes your choice of paint color. If you have a business at home, you may need a separate liability policy for the business.
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