See whether your lease requires the tenant to include you as an additional insured on the tenant's policy. If you are and additional insured, the tenant's lawyers represent you should you end up in court through a liability claim. If it does, confirm every year that you are on that policy as an additional insured. Also, coverage amounts are important to make sure that there is enough money allocated to defend the case as well as pay out a claim. You will need to consult a qualified insurance agent to determine whether you have enough coverage.
Also, your lease may have a hold harmless/indemnity clause in it that states that you will be held harmless from any and all claims, damages, actions, etc. by the tenant. This clause usually works both ways, meaning that both the landlord and tenant are held harmless from each others claims, damages, actions.
If you conclude that the policy coverage amount is appropriate, you confirm that you are on the policy as an additional insured, and you have a hold-harmless provision in you lease, you normally have enough layers of protection to allow you to do well in this type of lawsuit. Even so, your own personal comfort zone also comes into play. If all of these layers of protection are in place and you still feel vulnerable, then by all means, get the extra coverage.
Sep 8, 2010