Picture this: “you are having a romantic dinner in an upscale restaurant with your partner. Dinner is finished, the bill is paid and you are ready to leave and continue your evening at another place. When standing up, you accidentally hit the table of the two business people next to yours and their drinks tumble over onto their expensive laptop. Worse still, the candle on the table tumbles as well and sets fire to the tablecloth and the expensive suit of one of the businessman.
Restaurant staff rushes in and extinguishes the fire but the harm has been done: damage to the table, the laptop and the suit and burns suffered by the businessman that need treatment which prevents him for working for three weeks during which he loses income. On top of that, the restaurant has to close for the night and loses out on potential earnings because of that.”
Walk in the park
Or you are strolling along East Coast Park with your family on a nice Sunday. The kids are playing with the dog that manages to escape from its leash and goes after 2 young cyclists on expensive bikes. Your dog charges and bites one of the cyclists, who falls and takes his friend with him. Result: two badly damaged bikes and two bikers that need treatment of their injuries.
Water tub flooding
Ok, one more to make our point. You are preparing to leave for a weeklong well-deserved holiday and lock the door of your condo behind you. What you didn’t realised is that the water tap in the bathroom is still on. After some time, the sink overflows and water starts leaking to the floor and eventually seeps through the floor into your below neighbour’s apartment, causing extensive damage to structure and contents.
These are just some examples of the risks we face every day. You may think that these kinds of incidents are rare, but they happen more often than you think!
Legally everybody is responsible for damage caused to others by their actions or negligence, either accidentally or deliberately (this called “third party liability” or “personal liability”). In our examples, it is easy to see how the damages can add up to large amounts. On top of that, in situations where you are sued, even if you are eventually acquitted, you will be confronted with high bills for lawyers and other legal costs to defend yourself.
These costs can ruin your life. Not only can you lose your savings, investments, home or other property, you can also lose future earnings like wages or future assets when current assets are insufficient.
Personal Liability or Third Party Liability
Therefore, we at Insurance Market recommend everybody to buy a Personal Liability (also known as Third Party Liability) insurance which provides cover for amounts that you become legally liable to pay as compensation for injury or damage suffered by others as a result of your actions or negligence (or that of persons or pets who you are responsible for). Note that the keyword is legally, so it does not cover situations where you only feel a moral obligation to pay for damages, without a legal basis.
Home Insurance policy
In Singapore, Personal Liability insurance is commonly packaged into Home insurance. So, if you have one, we recommend reading your policy carefully, to better understand what is and isn’t covered. Usually, the insurance also covers your liability as homeowner or tenant and applies to your live-in family. You are also responsible for the actions of your domestic helper. Domestic helpers are typically covered under their Maid Insurance, another policy that you may want to compare carefully next time you extend it. Be aware that there are limits and exclusions to the liability coverage such as damage caused deliberately, motor vehicles (for which a separate insurance is compulsory), certain kind of pets (for which separate insurances are available), business activities, illegal activities. There can also be an exclusion for damages caused in USA/ Canada.
If you have any questions or need help finding the best insurance for you, check and compare detailed policy terms for free on Insurance Market, call us at 3158 4292 or chat online with us.