“But it wasn’t my fault!”—children say it all the time. But in the real world, we can be held responsible for damages resulting from our actions. That’s why we need the liability coverage, included in home insurance policies.

When you need personal liability coverage…

A fire in your house damages your neighbour’s home. Your aunt slips on your icy steps and breaks a hip. Your son’s friend breaks his arm while playing at your house. Your dog bites the pizza delivery person. You collide with another skier on the slopes, and they suffer a fractured skull. Your dishwasher leaks and floods your neighbour’s apartment. In every one of these examples, you could be held liable.

If a claim is made against you, you’re covered by the personal liability insurance in your home insurance policy. Your insurer can defend you and cover related fees. If you’re found liable, the insurance company will also cover compensation for damage or bodily injury if caused to others. This insurance covers all family members under the same roof, for accidents anywhere in the world.

How much coverage do I need?

If you travel outside the country often (to the U.S., for example), you’re much more likely to face a substantial liability claim. Basic coverage—usually $1 million—may not even come close to covering a loss. We strongly recommend opting for $2 million. It’s worth paying a small additional premium for extra peace of mind.

Important: Never admit responsibility. If you do, you could compromise your coverage and your right to compensation. It is your insurer’s job to assess the situation and determine who is at fault.

Tenant liability

If you live in rented accommodation and have a signed lease, your tenant liability insurance covers property that doesn’t belong you. For instance, if you accidentally damage the hardwood floors in your apartment, your liability insurance will pay for repairs. Coverage varies from one insurer to the next. Some insurers cover only 4 types of incidents (fire, explosion, smoke and water damage), while others provide all-risk insurance.

Particular situation for condo owners

Generally, your condo corporation covers condo owners’ liability for accidents in the common area. For example, if a delivery person slips on the building stairs, this is covered by your condo corporation’s insurance policy. However, you still need an insurance for your private part.

Your liability as an employer

If you hire someone to do work in or around your house, like a cleaning lady or gardener, and they get injured because of say, a broken ladder, a poorly installed shelf or a loos bannister, you’re covered by employer liability insurance that’s usually included in your policy.