A building can do more than suffer damage – it can cause it. A piece of render on a parked car, meltwater and an icicle on a passer-by's shoulder, a waterlogged neighbouring plot: when the building causes damage to an outsider, the roles are reversed, and the claim works differently from the property losses you are used to. This article sets out how liability claims run – from the report to the settlement.
- In a liability claim the injured party brings a claim against the building – the building's liability insurance responds on the terms of the policy.
- The golden rule: the building should make no statement admitting liability before the insurer is involved – documenting the case, on the other hand, is an immediate task.
- Liability is a legal question: in a disputed case the rules of civil law and, ultimately, the courts decide – and here too the insurer is on the building's side.
When does the building's liability arise?
Typically when the damage can be traced back to the condition of the common property or to a fault in how the building is run: unmaintained render, a slippery stretch of pavement that was not cleared, unsecured structures, falling snow and ice. The injured party may be an outsider – a passer-by, a driver, a neighbouring property – but also a resident: the building can be liable to its own residents too, if common property caused their damage. The cover behind this is set out in the building liability article; the subject here is the process.
The first steps: document, do not make statements
When a claim arrives – on the spot, by letter or in a lawyer's formal notice – there are two things to do immediately, and one definitely not to do. To do: document the case fully (the scene, photos, the time, witnesses, the injured party's details and their claim), and remove the hazard so that no further damage occurs. Not to do: admit liability or promise payment before the insurer is involved – a well-meaning promise made on the spot can complicate claims handling and weakens the building's position. Empathy and admitting liability are not the same thing: helping and showing sympathy is allowed, and necessary.
Reporting and claims handling
The building reports the liability claim to its own insurer – on the claims line, in the usual way, together with every document relating to the claim. From there the insurer works in a dual role: it settles a well-founded claim on the terms of the policy, and helps to fend off an unfounded one – again within the framework of those terms. This is the often-forgotten value of liability insurance: in a contested situation the building is not left alone facing the claim. The final question of liability is a legal one: in a genuine dispute the rules of civil law and the courts decide – the insurance side accompanies that, it does not replace it.
Prevention: this is where it is cheapest
Most liability claims turn out in hindsight to be the story of condition problems that had already been flagged: “everyone knew the render was coming off” is the worst sentence in a claim. The building's protection is twofold: documented maintenance and condition monitoring (walk-rounds, written records – following the checklist), plus liability cover with a realistic limit. For older buildings with ornate façades this is emphatically true: the downtown brick building article covers it separately. And if a liability case stalls: help from the broker applies here as well.
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