What is ‘Comprehensive Personal Liability’

Comprehensive personal liability (CPL) insurance is a component of a homeowners or umbrella insurance policy that protects the policyholder and members of the policyholder’s household against having to pay large sums out-of-pocket if they are held responsible for a personal liability claim.

BREAKING DOWN ‘Comprehensive Personal Liability’

Comprehensive personal liability insurance is coverage that protects an individual against claims for liability arising out of bodily injury or property damage claims related to personal activities.  There are three ways to get this coverage:

  1. It is packaged in with your homeowners, renters or dwelling insurance policy.  Most personal insurance policies include liability insurance coverage, which is also called comprehensive personal liability.
  2. The coverage can be purchased as a stand alone policy for individuals who do not own or rent physical property that needs to be covered separately.
  3. CPL can be added to an existing personal auto policy.

CPL coverage isn’t just limited to an insured premises. The coverage is usually worldwide, though you should check your policy to find out the coverage territory. The policy pays for bodily injury or property damage caused by an occurrence for which the coverage applies, subject to certain exclusions.

Homeowners policies usually provide a maximum of $100,000 to $300,000 in personal liability coverage. Umbrella policies pick up where these limits leave off and provide comprehensive personal liability coverage of $1 million or more. They also cover certain liability claims that homeowners insurance may not, such as libel, slander and invasion of privacy.

Coverage Scenarios for Comprehensive Personal Liability Insurance

  • Your dog bites a visitor to your home.
  • The mailman slips and falls in your driveway.
  • You’re found at fault for an expensive car accident.
  • Your child accidentally burns down his friend’s parents’ home after leaving a lit cigarette unattended.

If your homeowners policy limits are lower than the injured party’s claim and you have an umbrella policy, the umbrella policy will pick up where the limits of your homeowners policy leave off. For example, if your personal liability coverage under your homeowners insurance maxes out at $300,000 and you have a personal liability umbrella that maxes out at $1 million, if you’re sued for $800,000 for a covered incident, you’ll first pay your homeowners insurance deductible, perhaps $1,000. Then, your homeowner’s insurance will pay the next $299,000 of the judgment, which gets you to that policy’s $300,000 maximum. The umbrella policy will pay the remaining $500,000. You won’t have to come up with that half million from your personal assets thanks to your high amount of comprehensive personal liability coverage.