Property Damage Liability

Property damage liability is a subset of all typical general liability insurance policies. This coverage protects you as the small business owner from damages and claims to people’s property from which you and/or your employees have damaged.

Usually the biggest problem that arises in this coverage is that almost all general liability policies exclude property that is in your care, custody, or control. You can easily add this coverage back in but most insured’s are not aware that property in your care custody control is not covered. A contractor, who is out in the field installing a window, if the window breaks as you are installing it there is no coverage under property damage liability. What is covered is if the window that you are installing crashes down below and lands on somebody’s automobile the property damage from that accident would be covered.

The best way to remember this is that the property that you were working on, you must be careful, as the insurance policy is not going to cover your workmanship. If you are a commercial door hanger in the construction industry and none of the doors that you install fit properly your insurance policy, specifically the property damage liability coverage, is not going provide coverage. You have to stand behind your own workmanship.

Risk management tip of the day is that it is prudent for you as the insured to realize that your property damage liability coverage will not cover property that is in your care custody and control unless you specifically endorse your policy to provide that type of coverage.