Tenant liability insurance – what is it, who does it protect and against what?

Home insurance is an investment in your own peace of mind and protects your property against unforeseen events. When visiting a multi-agency insurance broker, we will also come across a second, very popular form of property-related insurance. Tenant liability insurance (OC najemcy) – for that is what we are talking about – is an increasingly popular policy, yet it is sometimes misunderstood. What exactly is tenant liability insurance, whom does it protect and against what, what are its limitations and how much does such coverage cost?

Tenant liability insurance – what is it and how much does it cost?

When browsing insurance offers, you can increasingly come across a product called “tenant liability insurance” (OC najemcy). The growing interest in this product is linked to the growing interest in renting property. This product is aimed not at owners of rental units, but at people who decide to live in rented accommodation. It is a special type of private insurance that protects the tenant against financial liability for damage caused to third parties. The term “third parties” covers not only the owner of the rented apartment, but also the neighbors. So if the tenant accidentally breaks a mirror, causes the floor panels to swell or damages the washing machine, the insurer will cover the damage on behalf of the insured. 

It does not matter whether the insured person stays short-term or long-term. Nor does it matter how many times they change accommodation – tenant liability insurance covers the whole of Poland, and sometimes even the European Union. This insurance is not mandatory, but if we live in a rented unit, it is definitely worth considering buying such a policy. All the more so because for around PLN 200 a year you can be covered for around PLN 50,000–70,000. For not much more, around PLN 350–390 a year, you can enjoy a variant with a higher sum insured, even up to PLN 200,000–250,000. Importantly, tenant liability insurance can also be extended with additional services, e.g., home assistance.

In what situations does tenant liability insurance apply?

From the description of the product itself, you can see that tenant liability insurance primarily protects the property of third parties. Keep in mind that tenant liability insurance will not apply if your own property is damaged. So if you spill boiling water on a desk, damaging your personal laptop and the owner's furniture, the insurer will only cover the cost of buying a new desk. There is, however, a second, much better side of the coin, which concerns damage caused by your loved ones. Even if only you hold the policy, the insurance also covers damage caused by your housemates. 

Your children drew on the walls with markers and they need repainting? Your partner damaged the shower cabin door? Your siblings or parents flooded the neighbors? Or maybe the dog chewed the couch or the cat scratched the headboard? In all these situations the insurance will apply and cover not only property damage, but also bodily injury. What is more, the vast majority of insurers also cover damage caused by a person employed to provide services in the rented unit. So if the nanny or cleaner you work with breaks a mirror, that damage will also be covered by the insurer.

Exclusions, or when the policy will not apply 

The case described earlier of causing damage to your own property is not the only exclusion in tenant liability insurance. The most important principle is that the damage must occur completely accidentally and unintentionally. Deliberate acts, e.g., throwing a chair in a fit of anger or maliciously breaking a keepsake vase, will not be grounds for an insurance payout. Gross negligence is also excluded, i.e., failing to take steps to prevent damage. If you put a dish that is not dishwasher-safe into the dishwasher and the appliance gets damaged as a result, the insurer may refuse to pay out. 

Another situation in which there will be no insurance payout is damage resulting from acts not classified as private activity. If you run a beauty salon in the rented unit and a client spills nail polish on the carpet, claiming compensation will be pointless. Other, less common exclusions include damage resulting from improper use of equipment, mining damage, and damage caused by animals excluded from coverage (e.g., semi-wild animals, aggressive dog breeds). It is therefore worth reading the general terms and conditions of insurance (OWU) carefully, as they form an integral part of the insurance.