Understanding Property Damage Liability Insurance

Your business has a duty to protect all those with whom it interacts. After all, by appearing responsive to mistakes you make, you might promote yourself as a trustworthy business. However, it isn’t all about keeping up appearances. In some cases, you have to compensate others in case you cause them harm — including if you cause them property damage. All the same, if you have property damage liability insurance, you might have help available. man turning open sign

Property Damage As Part Of General Liability Insurance
Most businesses have to carry liability insurance.

A liability is a situation in which one party is responsible for something else. In an insurance sense, it is the risk the insured party has of causing losses to a third party.

Because the insured party poses these risks to others, they might have a duty (personally and legally) to compensate the affected parties. Liability insurance, therefore, exists to help the insured person compensate others for the losses they might have negligently caused.

Businesses usually start their liability insurance portfolios with general liability coverage. A commercial general liability (CGL) policy is often the foundation of coverage that applies to the most-common liabilities that businesses pose others.

Among the coverage within these policies are usually property damage liability insurance. Simply put, if your actions or business operations damage someone else’s property, it is this coverage that can help you pay for the client’s damage.

Property damage can occur in many situations. However, no matter how small the incident, the costs might skyrocket. Property damage liability insurance can help you rise to the challenge.

How Your Policy Can Pay
Should your business damage someone else’s property, a variety of costs might impact the victim. These might face significant repair costs, or even the total loss of items. Some of these might even be irreplaceable. The interruption in their lives could get costly in multiple ways.

As a result, your business could suffer also. Even if you didn’t intend for an accident to occur, it still did. Therefore, the damage might be your responsibility to repair.

General liability insurance can help you cover the costs of a third party’s property repairs, item replacements and related costs. Furthermore, if the affected party sues you for their losses, then coverage can also pay for some or all of your legal costs and certain settlements.

Coverage For Accidents On Or Off Business Premises
Your business insurance can cover you in a variety of property damage situations. Therefore, in many cases, your liability coverage will follow you wherever you go. Think of it this way. You could damage a client’s property both on your business premises and in other locations.

On-premises accidents might include those incident where someone leaves an item in your care, which you accidentally damage. For example, if you plan to repair a client’s computer, but drop and shatter it, the client might demand reimbursement. Property damage liability coverage can help you meet the client’s replacement costs.

Off-premises property damage might occur if you visit a third party’s property as part of your business activities. For example, if you visit a client’s home to paint, but spill the paint on the client’s hardwood floors, then coverage might help you pay for cleanup and repairs.

Coverage Won’t Always Help You
As great as property damage liability insurance sounds, it won’t cover every property damage loss you might cause.

For example, if you cause property damage while driving a business vehicle, then standard commercial general liability insurance won’t help you. Backing your van into the side of a client’s house, for example, won’t have coverage. Rather, it is commercial auto liability insurance that can cover these losses. Most auto liability policies cover property damage.

Furthermore, only claims made while your policy is active will have coverage. The accident itself also usually has to occur during the policy’s active period to have coverage. All the same, you might be able to extend the period when you can file the claim by buying tail insurance.

Keep in mind, in most cases, policies won’t cover any property damage you cause by trying to commit illegal acts.

Of course, general liability insurance is not the only liability insurance that businesses need. It is only the beginning. To enhance your coverage for many more potential definitions of property damage, you might need:

Errors & Omissions Coverage that will insure financial losses caused by your professional mistakes or bad advice.
Cyber Liability Coverage that can protect clients in the event problems in your computer systems cause them harm.
Advertising Injury Protection that pays others in the event your promotional materials unfairly target them.
Personal Injury Protection that covers others if you accidentally commit libel, slander or related offenses against them.

Start your business liability insurance with at least property damage liability coverage. However, ask your Hill & Stone Insurance agent how you can increase and adjust your coverage to make sure it applies in more situations where you might inadvertently harm others.

Understanding Property Damage Liability Insurance

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