Personal liability insurance can help if someone says that you’re responsible for a bodily injury or property damage, whether at your home or away. Our guide explains what must happen before your personal liability coverage applies, what costs your insurer may pay, how coverage can differ for homeowner, condo, and tenant policies, and what to do if someone makes a claim against you.
This guide draws on the federal home-insurance guide, Insurance Bureau of Canada’s home-coverage guide, Ontario’s Occupiers’ Liability Act and General Insurance OmbudService’s claims guide.
How Does Personal Liability Insurance Work?
Personal liability insurance is generally a component of homeowner, condo and tenant insurance. Depending on the nature of the occurrence, who was involved, where it took place, and your policy’s terms, exclusions, and limits of liability, personal liability insurance may pay legal defence costs and compensatory damages if you’re held legally liable for unintentionally injuring someone else or damaging someone else’s property.
Just because someone gets injured doesn’t automatically mean you’re liable. In Ontario, the person in charge of a property generally has a duty to use reasonable care to ensure people who enter the property are safe. Deciding who’s legally liable depends on many factors, including any negligence, the facts and circumstances and control of the area. More than one person or company can be the “occupier” of a property. An occurrence in your apartment’s hallway isn’t necessarily covered under your tenant’s insurance, but it’s not necessarily your fault, either.
Why Is Personal Liability Insurance Important?
| Policy feature | What it may do | What it does not mean |
|---|---|---|
| Defence | Appoint and pay a lawyer to defend a covered lawsuit, subject to the insurance contract. | You cannot hire a lawyer or choose the legal strategy without consulting the insurer. |
| Compensatory damages | Personal liability coverage can pay a settlement or legal judgment you may owe another person for damage to their property or injury. | It does not pay fines, punishment or every amount demanded. |
Who And Where May Be Covered?
Examples That Need A Liability Analysis
- Your visitor slipped on your icy walkway – Was the walkway in your control to maintain? Was it adequately lit, salted, warned of and inspected? What was the weather like?
- You are at a local shop and break a fixture. Your off-premises property-damage coverage may respond to damage to the store’s property based on the coverage limits, circumstances, forms of coverage, etc.
Read More: See When a Renter May Be Liable for Guest Damage
What’s Excluded From Personal Liability Insurance?
Important note: Don’t make assumptions or conclusions on exclusions based on a one-line summary of the policy. Ask for the full clause and how it applies to the facts.
Personal liability insurance may exclude intentional damage/injury. Liability from a commercial/professional activity may need separate coverage. Ownership or use of most motor vehicles is excluded. Liability assumed only under a contract is excluded. Injury to you and your household is excluded.
This doesn’t mean all damage caused by water/earthquakes/storms, etc. is excluded, as the insurer will look at the allegation, what actually caused it, and the exact wording of your policy.
There is motor vehicle liability insurance, business liability insurance and professional errors and omissions insurance.
Read More: See Why Home-Based Work May Need Business Insurance
What To Do After An Injury Or Damage
If someone has been injured or property is damaged, it’s important that you:
- call for help if needed, make the area as safe as possible but don’t interfere with evidence
- get names, phone numbers and take pictures or videos
- gather information about weather, maintenance, etc.
- keep all original text messages, emails, photographs, videos, CCTV, etc.
- notify your insurer or broker as soon as possible even if there is no claim or legal proceeding. Tell them what happened but don’t speculate or admit liability. Don’t agree to pay money, sign releases or discuss settlement unless they agree in writing
- forward any demand letter, claim or legal papers immediately. Keep track of important dates
The insurer will tell you whether it will defend you.
If coverage is denied, ask for a letter about the decision and the parts of the policy the insurer thinks apply. If you don’t agree with the insurer’s decision, ask about making a complaint, the General Insurance OmbudService or a lawyer.
Read More: Review Liability and Insurance Issues After a Neighbour’s Tree Causes Damage
How Much Personal Liability Coverage Should I Get?
There’s no minimum coverage amount that’s appropriate for everyone. Consider your unique risks, such as whether your home has a swimming pool, trampoline, dogs, etc. Do you have a home-based business or frequently entertain in your home? Do you have a rental unit?
Compare available liability coverage limits with your overall exposure, including all your assets and income.
Many carriers offer excess liability insurance that kicks in after your liability coverage. Excess liability policies have underlying coverage requirements that must be in place before they will pay a claim.
What Liability Limits Appear In MyChoice Quotes?
Note that liability coverage should be selected based on your assets, income, lifestyle, etc., and may vary from what’s most frequently selected. Use the worksheet above to explore all your coverage options, compare available liability limits and umbrella insurance pricing, and review any requirements and exclusions.
Since the beginning of 2026, we’ve analyzed thousands of quotes from our platform and found that 85.7% of home insurance quotes include a $2 million liability limit.
For condo insurance, 67.0% of quotes include a $2 million liability limit.
In addition, 66.3% of tenant insurance quotes have a $1 million liability limit.
Tips On Reducing Personal Liability Risks
- Make sure stairs, walks, handrails and lighting are in good repair. Restrict access to your swimming pool, trampoline, dangerous tools, chemicals, construction areas and other hazards. Keep written records of property inspections and snow and ice removal procedures.
- Follow local animal rules. Tell your insurer about them if asked. Different insurers have different criteria for covering certain types of animals.
- Tell your insurer about rental activity, business conducted at home, remodelling, or other changes or risky additions to your home or possessions before relying on your insurer to cover them.