A piece of render falls from the façade onto a parked car. A visitor slips on freshly washed stairs with no warning sign. A slab of snow slides off the roof onto the pavement. What they have in common: the damage is not suffered by the building but caused by it – and then the building is liable. Building liability insurance is made for this situation, and it is perhaps the most underrated item among condominium covers.
- Building liability insurance steps in when the building – its condition or its operation – causes damage to a third party or to a resident.
- The typical cases: falling render and roof tiles, a slippery or defective walkway or staircase, a gutter coming away, a collapsing fence.
- The key number in this cover is the limit: in personal injury claims the amounts demanded can be orders of magnitude higher than we would expect.
When is the building liable?
The condominium – as the keeper of the common property – has a duty to ensure that the building and its surroundings do not endanger others. If a passer-by, a visitor, a neighbouring property or even one of the building's own residents suffers damage because of the condition of the commonly owned parts, a lack of maintenance or a fault in operation, the claim can be brought against the building. Where the injured party is a co-owner in the building, terms can differ: insurers typically reduce the payout by the part corresponding to the injured party's own ownership share, or the cover applies only with a separate extension – worth checking quote by quote. The legal details differ from case to case – liability is ultimately decided by the rules of civil law and, in a dispute, by the court – but the insurance side is simple: liability cover exists for exactly this risk.
What does the cover pay?
Building liability insurance pays, in place of the building and within the framework of the policy terms, the injured party's substantiated loss: for property damage the cost of repair or replacement, for personal injury the related claims. Alongside settling well-founded claims, the insurer typically also takes a part in fending off unfounded ones – which in a disputed situation is worth at least as much as the payment itself. The exact scope and the exceptions are set by the policy terms here too: this is how to read them.
The key number: the limit
A claim for a serious, permanent personal injury – including compensation for the violation of personality rights (non-pecuniary damages) and annuities – can reach the order of hundreds of millions of forints. That is why the most important parameter of liability cover is the indemnity limit: the amount up to which the insurer stands behind the building per claim and per year. It is worth looking at this when comparing – a “cheap” package with a low limit protects least exactly where the stake is highest. This is a textbook example of comparison based on content.
The building has caused damage – what now?
If a claim is made against the building, the right order is: document the incident (the location, photos, witnesses), record the injured party's details and their claim, then report it through the insurer's claims line and online claims portal – and importantly: the building should not make a statement admitting liability before the insurer is involved, because that can make claims handling harder. The details of the process: a liability claim in practice.
And what this cover is not
Two neighbouring areas belong elsewhere. A resident's own liability – for example a leak starting inside a flat – falls to the liability section of that resident's home insurance. And the property manager's liability arising from their decisions as an officer and as a professional is a separate genre: felelosseg.biz (in Hungarian) gives the picture on that. Building liability belongs to the building as a building – and that is exactly why every building needs it.
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