There’s a chance that you might cause harm to someone else while trying to provide your business services. Sometimes, the problem you cause involves property damage. Because the damage might be your fault, you therefore might have to repay that other party for their losses. The appropriate property damage liability insurance policy will help you in this regard. However, always make sure that your policy applies specifically to the risks you might cause in your line of work. Here’s a little more information to help you choose your policy.

What’s a Property Damage Liability?

Liabilities are the responsibility you have to something else happening. To insurers, a liability represents the chances that you will do harm to someone else. This means that, if you cause harm to someone else, you might have to repay them. In other words, your insurance might have to pay them on your behalf.

A commercial liability insurance policy can help you pay for another party’s (like a client, vendor or other person) losses when you have to do so. Therefore, you’ll be able to avoid paying for these losses out of your own pockets. You can furthermore use coverage to pay your own legal fees, should a disgruntled customer decide to sue you for the damage you caused.

Among the liability policies offered for many businesses is property damage liability insurance. This coverage will apply when you make mistakes that damage someone else’s property or belongings.

This coverage is important for business owners because they might handle or come into contact with someone else’s belongings any day of the week. You might not intend to cause damage to those assets. However, sometimes, simple mistakes might lead to damage. Still, even if the accident was a mistake, it could still cost someone a lot of money. That’s why you need to have this resource available. It will help you avoid your own financial challenges in case you do have to repay someone.

Where can I get coverage?

In many cases, you get property damage liability coverage through a commercial general liability insurance policy, also called a CGL policy.

Small business owners might be able to obtain their CGL protection through what’s called a BOP, short for a Business Owners Policy. BOPs usually contain many of the most-essential types of coverage that small operations need, including property damage liability policies. The BOP will contain terms and limits that favorably apply to the small business that wants to keep cost and policy cohesion under control.

All the same, not all businesses qualify for BOPs because of factors like their size, revenue, and industry risks. Still, you need liability policies even if you can’t get coverage through a BOP. You might have to buy your property damage liability coverage through either a stand-alone policy, or through a commercial policy package, or CPP. CPPs allow businesses to combine various policies into one package, similar to BOPs. However, they’re more useful to larger businesses that need customized coverage.

What Will My Policy Cover?

You probably realize that your policy is supposed to help you pay in case you do damage to someone else’s property. However, that’s a broad definition. You might wonder exactly what types of customer belongings might sustain damage. Some of these might include:

• Property you damage while trying to fix or service it.
• Property in your care that awaits service or is waiting to be picked up by a client.
• Damage to someone’s home, business or other belongings when visiting their property.

Keep in mind, however, that to cover a wider range of property damage liabilities, you might need additional policies and endorsements. Here are a couple of examples:

• Property damage might be caused by an item you made and sold to a client. You might need a special product liability endorsement to cover this loss.
• Or, perhaps, problems will arise from project you previously completed for a client, which subsequently harms them or damages their property. In this case, you might need a slightly different products-completed liability endorsement for the damage.

The interesting thing about a commercial general liability policy is that it can often cover you for property damage that you cause both while on and off your business premises. Therefore, whether you work exclusively from an office, or make house calls, you’ll have a policy available.

Still, even with wide-ranging policy specifications, your policy likely won’t cover every type of loss. For example:

• Intentional property damage acts, like vandalism, that you or one of your employees might cause will usually not have coverage.

• If you cause a wreck while driving a company car, it is commercial auto liability insurance, not general liability coverage, that will pay for the other driver’s property damage.
• If claims exceed the limits of your property damage liability policy, then you might not have coverage for the excess costs.

Talk to your insurance agent about any questions you have regarding your property damage liability insurance. Our expert team can make sure you know when your policy will and will not cover you. We can also make extensions and increase the limits of your policy so that they will offer comprehensive protection at all times.