What is Personal Liability Insurance in Canada?

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Alexandre Desoutter updated on 7 November 2023

Each year in Canada, homes are damaged to the tune of more than $2 billion, and that number is on the rise. Your home is undoubtedly one of your most valuable possessions, and protecting it simply makes sense, but any property comes with its hazards, not just to your belongings but also to other people.

How would you handle someone getting hurt on your property? Are you protected against personal liability? Did you know you can get insured against it?

This guide helps you understand personal liability and umbrella insurance in Canada. Learn what is covered, how personal liability insurance is also for renters and why you need to know about it.

What is personal liability insurance?

Personal liability insurance is most commonly part of home insurance or sometimes an umbrella insurance policy, and it protects the members of a household against any claims of injuries to a third party or damage to that person’s property. With the many accidents that inevitably occur in and around your home, there’s simply no way of entirely eliminating the risks. The only way to get peace of mind is with personal liability coverage.

Personal liability might seem like a complicated term, but put simply, if you are held legally responsible for something bad that happens to someone or their belongings, you are personally liable. Personal liability insurance helps you avoid having to pay a small fortune out of your pocket in such an event.

Expert advice

Unexpected incidents can impact your life and put you in financial hardship. That’s why the best home insurance and personal liability coverage are essential to keeping you protected.

Compare the best personal liability insurances on the market using our free comparison tool below:

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Why do I need personal liability insurance coverage?

Home insurance and personal liability insurance are the only way to protect yourself and your family in the event that a third party or their property gets injured or damaged from an accident or negligence. Personal liability insurance coverage ensures that the cost of legal fees, court costs and settlements do not devastate you and your family financially.

When a person sustains accidental bodily injury or property damage as a result of a company’s neglect or on a company’s property, that company is legally responsible for that harm. If the same situation occurs on your personal property or as a result of your neglect, you are equally responsible under the gaze of the law in Canada. Just as professional liability insurance protects a company, personal liability coverage within your home insurance shields you and those who live in your home.

What does personal liability insurance cover?

Insurance for personal liability covers misfortunes to other people that you, or someone in your household, unintentionally cause or could be held accountable for — it does not cover accidents for which you are the victim.

Personal liability insurance includes personal and premises liability coverage meaning it protects you against legal responsibility for losses caused by injury to others but also against any damage to their property. In addition to the legal fees, liability insurance also covers any out-of-pocket medical expenses the injured party incurs as a result of the damages. Liability lawsuits do not often reach the courts, but claims are common.

Given that unlimited personal liability coverage does not exist, you can also purchase extra protection with an umbrella insurance policy, which provides additional liability insurance beyond the boundaries of your home insurance and includes extra protection, for example, against libel and vandalism.

Keep in mind that each policy is different, and you should read your contract carefully before signing. For instance, many personal liability policies fail to cover accidents related to business activities or construction. To be fully protected, be sure to fully understand what your policy covers and what it doesn’t cover.

Good to know

Have more questions? Our guide to home insurance has answers.

How much does personal liability insurance cost?

Home insurance and personal liability policies vary from provider to provider and depend on the protections the insurance policy provides.

Here is the cost of home insurance with varying personal liability coverages for a typical family in three Canadian provinces from a leading insurance provider:

ProvincePersonal liability coverage limitMonthly premium
$1 million$95.75
$2 million$97.17
$1 million$143.08
$2 million$145.50
$1 million$134.08
$2 million$135.42
Personal liability insurance prices

Personal liability insurance quotes vary based on where you live, the value of your home and many other factors. Because of this, you’ll need to compare providers and get a personalized quote to know how much you’ll pay. We make it easy to get started.

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How much personal liability coverage do I need?

Most home insurance policies include protection against liability for personal injury to a third party. However, the personal liability coverage of most home insurance policies is often limited to around $100,000, which might not be enough to secure all the legal and medical expenses in the case of a damaging incident for which you are considered responsible.

As a result, increasing your personal liability coverage to $2 million ensures that you and your family are protected in almost any scenario. Supplementing your personal liability insurance gives you room to breathe if you get sued for injury or property damage. If you simply cannot afford to increase your periodic premium, it might be worth getting a quote for the coverage you want first and gradually increasing your coverage until you obtain the protection you need.

For the most part, Canada’s legal battles are far less fierce than those of the U.S. However, personal liability claims in Canada are frequent, and it is often worth getting some extra peace of mind. Nevertheless, how much protection you in fact need depends on your unique circumstances and the risks you encounter. It is important to compare policies and quotes to secure the best home insurance and coverage for personal liability.

Good to know

A $2 million personality liability insurance policy will make sure that you and your family are ready for almost any scenario.

Can I buy personal liability insurance if I don’t own a home?

Yes! Home insurance and renters insurance are very similar in their personal liability coverage. Personal liability coverage is available to renters and condo owners alike. Liability coverage in home insurance, renters insurance and condo insurance policies work broadly the same way in each case.

Renters, though, are only responsible for the living spaces in a home as opposed to the entire property. In other words, a tenant is not legally liable for any accidents that might happen outside their front door, but a homeowner may be.

In any case, most claims for personal liability in Canada happen in circumstances that affect both landlords and tenants, making personal liability coverage an important consideration for everyone.

Tips for saving on personal liability coverage

When buying home insurance, a few tricks can help you save on your monthly premium. It’s important to remember that different policies have different personal liability coverage limits, making it essential to read a personal liability policy carefully before purchasing it so you know exactly what you are protected from in the case of a claim made against you. Also, note that personal liability coverage usually excludes business activities or construction projects in your home.

Here are some tips for saving on home insurance and personal liability coverage:

  • Use the same insurer for different needs: Bundling your home and car insurance with the same company often leads to a multi-policy discount. To multiply your discounts (and your savings), consider insuring more than one vehicle with the same insurer as well to receive a multi-vehicle discount.
  • Be preventive: Besides maintaining your home to reduce risks, being preventive by having systems in place to monitor your home for leaks, fire and theft — for example with your smartphone — also works to reduce your premium.
  • Pay off your mortgage: During the application process, most insurers will ask you if you have any debt associated with your home. If you do not have a mortgage, insurance providers will offer you home insurance and personal liability coverage for more attractive prices.
  • Look out for group discounts: Insurance companies often offer discounts to members of certain companies and institutions such as school alumni and company workers. It’s worth asking if you qualify for any group discounts before you sign a policy.
  • Increase your deductible: To bring your monthly premium down, you may want to consider increasing the amount of money you pay upfront before being able to trigger your insurance. However, note that this means a greater financial burden in the case of a personal liability claim filed against you.
  • Shop around and compare: Comparing different policies from different companies always helps to ensure that you get the insurance coverage you need at a price point that is comfortable for you.

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Alexandre Desoutter

Alexandre Desoutter has been working as editor-in-chief and head of press relations at HelloSafe since June 2020. A graduate of Sciences Po Grenoble, he worked as a journalist for several years in French media, and continues to collaborate as a as a contributor to several publications.