Running a small business brings a lot of benefits. You get to set your own hours and control how and where you work. But it’s also a little uncertain. When you’re a small business owner, you can’t predict what’s going to happen next week or next year. That’s why you buy business insurance.
Getting the right business insurance adds a layer of protection against the unexpected. Public liability and property damage insurance are types of insurance that every small business needs.
General liability insurance is the most important type of insurance for small business. It protects your business against claims for bodily injury from any third party, like a client who trips over the carpet in your office and sprains their ankle.
But have you thought about property damage coverage? It’s insurance that every small business should have. We explain all you need to know about property damage liability insurance, and why you need it.
What does Property Damage Liability Cover?
Property damage liability insurance protects you in case of liability for damage to property belonging to someone else during your work. For example, if you scratch the paintwork on someone else’s car, or break an expensive vase in a client’s home.
It does not protect your own property from damage. For that, you need business property insurance.
Why do I Need Insurance for Damage to Property?
Damage to someone else’s property can happen more easily than you’d think, even though you’re careful. What’s more, you could have liability for damage to property even if the damage was not your fault. For example, your assistant caused the damage, or the client themselves didn’t look where they were going.
The average customer injury or damage claim comes to around $30,000. You’ve definitely got better things to do with $30,000.
The Most Common Accidents that Cause Property Damage Insurance Claims
1. Water Damage
Water damage is among the most expensive property damage insurance claims. For example, you’re hanging pictures in a client’s basement when you drill into a major water pipe. The pipe floods the entire basement before you’re able to turn off the water.
You’ll need to pay for:
- A plumber to fix the pipe.
- The cost of pumping out and cleaning up the water from the basement. This generally costs $3.75 per square foot for clean water, or $7 per square foot for contaminated water. A basement with 1 inch of standing water could cost $4,000+ just for water removal.
- Professional fees for drying out the basement and preventing mold damage.
- If the water to the whole house is off for a day or more, the family might need to stay elsewhere, and you’ll need to pay their accommodation costs.
Actual costs for fixing water damage could come to over $60,000.
2. Making a Mistake
If you make a professional mistake, it’s often covered by professional liability insurance. But if your mistake damages someone’s property, it’s best to use property damage insurance.
For example, you use the wrong cleaning treatment on a customer’s expensive Persian rug, ruining the colors. Your customer sues you to pay for a new rug.
Or you’re a computer consultant installing business software on a client’s expensive business laptop. You click the wrong download link, and install a virus which destroys the entire operating system. The customer sues you for a new computer, and the cost of rescuing vital business data from their hard drive. The computer alone could cost you over $1,000 dollars.
3. Damage at your Premises
You’re liable for property damage at your premises, even if you didn’t directly cause it. For example, a client comes to see you in your office. On the way in, they trip over an extension cable to your portable heater. They aren’t hurt, but their smartphone is smashed. You have to pay for it to be repaired or replaced.
Or when a client comes into your office, they rip their sweater on a nail sticking out near the door. It’s an expensive sweater, so they sue you for several hundred dollars for the damage.
4. Fire Damage
If you cause a fire, you could end up having to pay a huge amount for the fire damage. E.g. You’re an electrician. You’re rewiring a client’s lighting system when you spark an electrical fire. You have to pay for:
- Repairs to any items damaged by the fire
- Reasonable replacement for items destroyed by the fire
- Loss of use, because the family can’t live in their home while the damage is being fixed
- Smoke damage to a neighbor’s home
This can add up to several thousand dollars.
5. Impact Damage
It’s scarily easy to cause property damage by dropping something or knocking something over. Here are some examples:
- You’re carrying your ladder into a customer’s home. You forget how long it is and smash an expensive vase that’s standing on the coffee table.
- While bringing your heavy DJ equipment into a wedding venue, you turn carelessly and hit a mirror, cracking it from side to side.
- You’re discussing a personal training program with a client over coffee. You knock their coffee mug over their smartphone, ruining it completely.
- You drop your toolbox on your way into a client’s home, and it leaves a dent in the hardwood floor.
These minor accidents would usually settle out of court for a few hundred dollars, but you’d rather not have to pay out that kind of money.
How to Get Property Damage Coverage
You can get property damage insurance from a good small business insurance company (like Next Insurance). Usually, property damage insurance is part of a larger general liability insurance policy. This includes insurance for bodily injury and for personal injury, as well as property damage coverage.
Property Damage Liability Insurance Protects Small Business Owners
When you buy insurance for damage to property through Next Insurance, you get peace of mind and protection for your business. Next Insurance offers unlimited additional insured, and an online live Certificate of Insurance that you can access, download, and print whenever you like without any additional charge. Our customer service is legendary. Public liability and property damage insurance premiums are very competitive at Next Insurance. Best of all, you can spread your payments out across 12 months without paying more, instead of paying it all in a single lump sum.
