Which statement about a tenant’s HO 4 policy's liability coverage is true?

• A. Fire is covered as a liability event
• B. Water damage from leaks is never covered
• C. The policy excludes liability for civil damages
• D. Liability only covers guests on the premises

Answer: (A)

In a renters HO 4 policy, liability coverage protects you against claims by others for bodily injury or property damage caused by you or your household. A key feature is fire legal liability: if a fire that starts in your rental unit damages someone else’s property, the liability portion can pay those damages up to the policy’s limit. This covers you for the civil claim that flows from a fire that originated in your unit, even though the fire affected another party’s property. This is separate from coverage for your own belongings or for damages to your own unit.

Water damage from leaks isn’t automatically excluded from liability, and it isn’t guaranteed to be covered in every situation; coverage can apply if the leak causes damage to someone else’s property and you’re found responsible, subject to policy limits and exclusions (like flood or sewer-backup rules). The policy does not exclude liability for civil damages—liability coverage is specifically to handle such claims. And liability isn’t limited to guests on the premises; it covers third parties who suffer damages caused by you or household members, wherever the incident occurs.