Property damage

What is property damage?

Property damage is the damage or destruction caused to physical or intangible property. It’s considered ‘damaged’ if the property:

• Loses monetary value
• Loses functionality

What types of property can get damaged?

Property falls into two categories: real property and personal property.

Real property is land or things attached to land. This might include your home or building, a tennis court or swimming pool sitting on your land and the trees on the land.

Personal property is all other types of property. This includes your stuff — things you own and can move around, like clothes, cars, art, jewelry and electronics. Personal property can also include things that can’t be seen or touched (intangible). This might be your bank account, intellectual property, occupational licenses and investments like stocks or bonds.

What are the most common causes of property damage?

Some of the most common causes of property damage are:

• Fire
• Water
• Theft
• Neglect
• Human error
• Infestation
• Air quality malfunction
• Poor/non-functioning climate control

What can you do to reduce the risk of property damage?

To lower the risk of having your own property damaged, you can:

• Ensure your building is up to code through regular maintenance.
• Educate your employees on safety procedures.
• Install security measures like alarms and surveillance cameras
• Install weatherproofing and fire safety measures like storm windows, smoke detectors and sprinkler systems.
• Implement pest control.
• Back up your files and data.

And to reduce your own liability in damaging other people’s property, you can:

• Maintain your property and address any hazards promptly.
• Reduce clutter and post warning signs to alert visitors of potential hazards in your place of business to prevent injuries.
• Use detailed contracts that clearly explain the scope of work, deadlines and costs.
• Get business insurance to help protect your business.

What types of insurance coverage can protect against property damage?

• General liability insurance: This coverage can help pay for repair or replacement costs if you accidentally damage property that doesn’t belong to you.
• Commercial property insurance: This can help cover damage to the physical structure of your business premises and its contents, including inventory, furniture and equipment.
• Commercial auto insurance: If your business vehicle damages someone’s personal property, your insurance can pay for repairs or a replacement up to your policy limit.

What’s needed for property damage claims

As in many insurance claims, you’ll need to provide proof of the loss and the extent of the damages you wish to claim. This means establishing the value of the property, proving the cause of the damage and taking any potential loss claims resulting from the damage into account.

Prevent property damage stress with a NEXT

As a small business owner, you want to do all you can to protect your business and have peace of mind.

NEXT is easy to use and always available. We give you 24/7 online access to your plan and policies to help you manage your coverage with ease in case of an emergency.

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