Property damage involves the harm, breaking, or impairment of something your business owns. This can include your work vehicles, business property, and items they contain—such as office equipment and merchandise.
There are two types of property damage: physical injury and loss of use. Physical injury involves damage to tangible property such as a cash register, a forklift, or a desk.
Loss of use involves something that hasn’t suffered physical damage, but your normal usage of it is interrupted. If a truck broke down and blocked customers from accessing your business, or if someone’s construction work shut off the water supply to your business, these could be considered a loss of use.
Commercial property insurance covers damage to your business property from things like theft, vandalism, and fire.
Business interruption insurance, also known as business income insurance, can help offset a loss of income if your business has to close temporarily because of a catastrophic event, such as a fire. It can help pay for lost revenue, day-to-day expenses, and rent or relocation costs.
Inland marine insurance covers your business property while it’s in transit or being stored away from your business, such as a warehouse or a customer’s property. It can also cover high-value assets that property insurance usually doesn’t cover.
Property damage liability insurance is a type of vehicle insurance that is required by most states. If you are at fault in an accident, this would cover the damages your vehicle caused to someone else’s property, such as a building or vehicle. It does not cover damage to your own vehicle.
Commercial general liability (CGL) insurance covers third-party damage claims, in case you or an employee damage someone else’s business or personal property.
Commercial auto insurance covers third-party claims from your use of business vehicles, in case you or an employee are at fault in an accident with a personal injury or property damage. This coverage can also include your own vehicle during work-related use, such as making deliveries.
Many businesses purchase a business owner’s policy (BOP) from their insurance company. A BOP insurance policy combines commercial general liability and commercial property insurance into one policy, with premiums that are typically less than if you bought these coverages separately.
Your vehicle’s bodily injury liability coverage, also referred to as bodily injury liability insurance, helps cover the cost of medical expenses and lost income if you face a liability claim for an at-fault accident. It may also cover any tort costs in case of a lawsuit.
Collision insurance is often required for leased vehicles and those with outstanding loans. It’s worth considering even if you own your vehicle outright, as it helps cover the cost of repairs or replacement of your vehicle if it’s damaged in an accident with another vehicle, or damage from a stationary object through an act of nature, such as hail or a fallen tree limb.
Keep in mind that you can’t rely on your regular liability car insurance policy and collision coverage for work-related activities. While your insurer would cover a car accident on your way to and from work, it would likely reject your claim if you’re in a work-related accident using your own car. Also, make sure you meet your state’s minimum insurance coverage limits for vehicle liability coverage.
You also may require additional coverage if your business rents or leases vehicles for its operations. If you or one of your employees gets into an accident involving a vehicle that your business uses but does not own, hired and non-owned auto insurance (HNOA) can help cover your legal costs.