What is Property Damage in Liability Insurance?

What is Property Damage in Liability Insurance? - Definition

Property Damage in Liability Insurance is defined as

• physical loss, destruction of or damage to tangible property, including loss of use from such physical loss, destruction or damage; or
• loss of use of tangible property which has not been physically lost, destroyed or damaged.

Which types of Insurance Policies provide coverage for Property Damage?

Various Insurance Policies provide coverage for Property Damage Claims such as

1. Commercial General Liability Insurance
2. Public Liability Insurance
3. Product Liability Insurance
4. Fire Insurance Policy
5. Business Interruption Insurance Policy

The CGL Insurance Policy and Public Liability Insurance Policy provide coverage for legal liability for Third-Party Property Damage while a Fire Insurance Policy provides reimbursement to the Policyholder for Property Damage to Insured Assets. A CGL Insurance Policy or a Public Liability Insurance Policy will provide coverage for Defence Costs and Compensatory Damages in case of a Property Damage Claim. A Business Interruption Insurance Policy provides compensation to the Insured for the loss of Gross Profits faced by the business due to Business Interruption caused by property damage to the Insured Assets by Fire and Allied Perils.

Examples of a Property Damage Claims

• Imagine you’re a Garage Owner repairing vehicles. While repairing a vehicle, one of you employees damaged the client’s vehicle. The vehicle owner could sue you for damage to his vehicle.
• Or say, for example, you’re a restaurant owner. One of your employees, by mistake, damages an expensive equipment of a guest who was having dinner at the restaurant. The guest can sue the restaurant for property damage.

Which types of businesses need Property Damage Coverage?

Most business owners require a CGL Insurance Policy and a Fire Insurance which provides Coverage for damage to own assets as well as damage to Third Party Property. Businesses which have frequent public visitors like Cinema Halls, Restaurants, Hotels should definitely purchase a Commercial General Liability Insurance Policy as they have a high probability of getting sued for Third Party Property Damage. Accidents can happen anytime and without appropriate Insurance Coverage, the business owner would be responsible for Defence Costs and Damages. Sometimes these costs add up to lakhs of rupees. Thus, it is extremely important to purchase a CGL Insurance Policy which will provide coverage against expensive lawsuits, should such a need arise.

How to file a Property Damage Claim?

The following steps lists down the process to be followed when your business is sued for a Third-Party Property Damage

• Intimate the Insurance Claim as soon as possible to the Insurance Company
• Provide relevant information such as Name of Insured, Policy Number, Contact Information, Claimant Information, Description of Accident and Damages suffered
• Submit the Claim form to the Insurance Company If the Claim is admissible, the CGL Insurance Policy will provide Defence Coverage under the Duty to Defend Provision.

Conclusion

A single Property Damage Claim can set back a business by years and thus a CGL Insurance Policy is a must have for all businesses. Qian is an experienced Insurance Broker for commercial insurances and can assist you with the best quotes and comprehensive coverages for your Commercial General Liability Insurance Policy. Apart from CGL Insurance Policy, our team can also assist you with other insurances such as Cyber Insurance Policy, D&O Liability Insurance Policy, Commercial Crime Insurance Policy etc. Get a Quote Today or email us at insurance@qian.co.in or call us on 022-35134695. We would be glad to assist you.