What is a Property Damage Liability?

Part of your commercial insurance package is likely to be general liability insurance, which is coverage that will apply when you are at fault for the harm that someone else sustained. This coverage commonly applies to bodily injuries, such as those that a customer sustains when they slip and fall in your store. However, your business both faces countless liabilities of its own and poses liabilities to others. One of these is the risk of third-party property damage. 

There’s always a chance that you might cause someone harm or property damage, even through accidental mistakes. That’s why you should be able to rely on your liability insurance’s property damage coverage to come to your aid. Here’s how it works. 

What is liability insurance? 

A business’s liability insurance will help the company protect itself in case its mistakes or negligence ever cause harm to others. You have a duty to serve your customers professionally, safely and satisfactorily. While you strive to do so, you cannot ignore the fact that at times something might go wrong, and you might wind up doing a customer harm.  

While this harm might have been unintentional, that does not mean that you are not responsible for it. As a result, you might have to repay the person who sustained harm, and liability insurance will allow you to do so without having to dig deep into your own pockets. Given that liability lawsuits and settlements often cost hundreds of thousands of dollars, your liability insurance could be the way to avoid facing a significant personal blow. 

How does it apply to property damage? 

Damage that you do to someone else’s property might be as harmful to them as any injury. For instance, you might be a HVAC serviceman who is tasked with repairing someone’s heating system. However, when doing so, you accidentally cause a spark in the system, which ignites into a fire that significantly damages the home.  

It’s very easy to see exactly how costly and devastating a loss thig might be to the homeowner. However, because this accident occurred as part of your work on the home, the fault for it will lie with you. Therefore, you will have to repay the property owner for their trouble. The property damage coverage within your general liability policy will help you do so. 

Furthermore, there is a chance that property damage might arise even after you have completed your work. For example, though you might have repaired someone’s water line, there’s a chance that one still might break several days later, and the homeowner demand that you pay them. Under these circumstances, a component of your liability policy called completed operations coverage will ensure that you still have the means to compensate them for their losses.