What is condo liability insurance?

By Allstate

Last updated: January 1

When you invite guests to your condo, injuries and lawsuits are likely not the first thing on your mind. But a simple accident — for instance, a friend trips on your throw rug and falls — can potentially lead to medical expenses and even lawsuits. That's when liability coverage can help protect your assets.

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Learn what the condo association covers

While a condo association's insurance typically includes liability coverage, it generally only applies if someone is injured in the common areas. Common areas generally include shared spaces such as hallways, clubhouses and elevators.

What does personal liability coverage protect?

Personal liability coverage is part of a standard condo insurance policy purchased by the owner of a condo unit, according to the Insurance Information Institute (III). It can help protect you if you are sued or a court judgment is made against you because of an accident in your home or if you cause damage to someone else's property, the III says. The coverage might kick in, for example, if someone sues you after taking a spill in your kitchen.

Condo policies often include guest medical protection, which will help protect you financially if someone requires medical treatment resulting from an accident in your home, the III says.

Liability coverage typically also extends to damage caused by your pets, the III says. So, if your dog bites someone, resulting in medical expenses or a lawsuit, your condo policy may help cover those costs.

Additionally, most condo policies will include some protection if your association charges a special assessment to all owners following an injury or damage in a common area. For example, if a member of your association hosts a gathering at the clubhouse and a balcony collapses, resulting in injuries, your association may issue an assessment to cover the guests' medical expenses. The loss assessment coverage in your personal condo policy may cover a portion of your share of the bill, according to Property Casualty 360.

Limits are usually associated with condo liability coverage, which means the policy may provide coverage up to a certain amount. For instance, personal liability coverage typically offers $100,000 to $500,000 in protection, according to The Washington Times. An insurance agent can help you determine the amount of coverage that is right for you.

Is a standard policy enough?

While a standard condo insurance policy will help protect you, a personal umbrella policy could offer additional coverage by extending the limits of your coverage.

An umbrella policy can provide additional liability coverage once your standard coverage has been exhausted, according to the III. Insurers typically require you to purchase at least $300,000 of liability insurance as part of your standard policy before they'll sell you an umbrella policy, according to the organization.

One lawsuit — even if you win — can take a financial toll. An insurance agent can provide information that will help you choose condo insurance coverage that best fits your needs.