Welcome to the NREIG “Is It Covered” series. These quick reads help you increase your understanding of your insurance coverage, clear up confusion and avoid preventable losses!
So, what’s the confusion?
Many assume that pools, trampolines and other recreational equipment sitting in the yard are insured. Some also make the assumption that if a person (child or adult) is injured while using this “outdoor equipment”, coverage will be available to help reimburse any medical expenses. In truth, policies can vary quite a bit on this topic. Some may include these items while many will choose to exclude them as they are considered “attractive nuisances.”
What types of damage could be excluded?
There are two main types of damage that could be excluded: Property Damage and Bodily Injury
Some examples of Property Damage could be:
- One of your trees falling on your tenant’s jungle gym in the backyard.
- Tree roots damaging your in-ground pool.
- Your pool lifting out of the ground after a long period of heavy rains.
Though some policies may offer coverage for this damage, many will often exclude damage to pools or coverage for a pool may be offered, but only as an additional (and limited) coverage that must be specifically added and likely for an additional cost.
Bodily Injury in this case is “any type of injury, sickness or disease sustained by a person, including death,” resulting from the use of the pool or outdoor equipment. It may be a broken tailbone caused by a slip-and-fall on the pool deck or a broken arm caused by a fall from the swings, for example.
Could I be held responsible for an injury that occurs on playground equipment owned by my tenant?
Hopefully your tenant won’t sue you for an injury that occurs while their child is playing on equipment that they own, but you may end up getting tangled in a lawsuit if a guest, or trespasser, is injured on that same equipment because you allowed it on your premises. Even if you aren’t found to be negligent, you still may end up with legal fees from having to prove your innocence. Insurance policies can include clauses that remove their responsibility to defend you, for example: “Where there is no coverage under this policy, there is no duty to defend.”
What happens when someone trespassing on the property is injured in connection to my in-ground pool?
Pools are typically considered “attractive nuisances.” An attractive nuisance is something that is interesting enough that it would cause a child to enter another’s property. This being the case, the law may place a special responsibility on you to take steps to protect the children who may come onto your property. If you fail to take steps to prevent harm to children in these cases, you may be held liable for a child injured on your property.
What does the lawyer-y-speak version of this exclusion look like in my policy?
Sample policy language may look similar to this:
Exclusions Regarding Injuries or Damage to Others’ Property
General Pool Exclusion
“We” do not pay for “bodily injury” or “property damage” liability arising out of the ownership, maintenance (including damage arising from the discharge or spillage of chemicals used), operation or use of any swimming pool.”
Swimming Pool Exclusion and Limitation
“No coverage is provided under this policy for Bodily Injury arising from the insured’s ownership of a swimming pool that is unfenced and/or not in compliance with the city or state laws or safety requirements. The limit of liability that is applicable to any claim or suit brought against an insured relating to swimming pools is $25,000 including all expenses and defense costs.”
Trampoline and Similar Equipment Exclusion
“…this Policy does not apply to “bodily injury”, “property damage”, “personal injury”, “advertising injury”, disease or illness including death resulting from such disease or illness, alleged disease or illness, or any other damages for past, present, or future claims arising in whole or in part, directly or indirectly out of the use of a trampoline or inflatable device.”
Damage to Property
“This insurance does not apply to…”Property damage” to:
(1) Property you own, rent, or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another’s property;
(3) Property loaned to you
(4) Personal property in the care, custody or control of the insured;
Exclusions Regarding Physical Damage to the Equipment Itself
“We will not pay for loss or damage caused by… earth sinking (other than sinkhole collapse), rising or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty. Soil conditions include contraction, expansion, freezing, thawing, erosion, improperly compacted soil and the action of water under the ground surface.”
“We will not pay for loss or damage caused by… water under the ground surface pressing on, or flowing or seeping through:
- a) Foundations, walls, floors or paved surfaces;
Outdoor Fixtures and Furniture Exclusion
“…this Policy does not insure any loss or damage, cost or expense or any increase in insured loss, damage cost or expense which arises from loss or damage to outdoor furniture or fixtures, whether or not directly or indirectly caused by or resulting from any peril otherwise insured under this Policy.”
*As insurance policies may vary, please check your own policy for language specific to your covered property.
How much can this type of damage cost me?
While the cost of a jungle gym or trampoline can range from a couple hundred dollars to a couple thousand, estimates for a new in-ground pool can range from $20,000 up to $80,000 according to HomeAdvisor. If your pool is physically damaged, you may find yourself footing a repair bill of ~$80-$2500 to a complete replacement, but the greater expense is if someone is injured. A pool or any piece of play equipment can pose risks ranging from a sprained ankle, to broken bones, paralysis or even, death.
What can I do to protect myself?
First, know what is in your policy: Read the sections of your insurance policy that address pools and other outdoor equipment. It is important to know both what you are and are not covered for. If you don’t understand something or have questions, don’t hesitate to contact your agent who should be happy to help you!
Consult your legal counsel in regards to “attractive nuisances” in your area: Be sure you know what you are legally responsible for in regards to protecting third parties from being injured on your property and take the appropriate measures to abide by those laws. Also remember that commercial properties (apartments) often have different pool regulations than single family homes.
If you allow your tenants to install an above-ground pool or keep play equipment, don’t be shy about checking the condition in your regular maintenance check: It may seem a little odd to some that you want to check the condition of their jungle gym, but it’s as simple as letting your tenant know that it is a stipulation of them keeping that equipment on the premises. They will be happy to know that you care about the safety of their family, but also need to know that as the property owner, you care what happens on your property. After all, they don’t own the place, you do, and that may just get you fined when their above ground pool becomes a mossy mosquito haven.
Consider not having pools or allowing other types of play equipment on your properties: It may seem like you are being a kill-joy by not allowing play equipment on your property, but you have to carefully consider the risks versus the rewards. Amenities are great, but if the risk of injury outweighs the benefit to your tenant, it may not be worth the chance.
Either way, be very specific in your lease: If you decide to allow pools and outdoor equipment at your property, be very specific as to how they are to be used and who is responsible for upkeep. If you don’t allow these items, spell that out clearly. In either case, thoroughly review the entire lease with your future tenant and have them initial by those items to signify that they understand the terms of the lease….and then be sure you enforce it!