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Contractors, what is a property damage claim?

Did you know that the building and construction industry employs more than 11 million people? This industry comprises more than 400,000 small and medium businesses. As a business owner in the construction industry, you know only too well that unforeseen circumstances can result in various types of damage, leaving your company open to liability claims.

Third-party property damage falls into the liability claims category. But what are property damage claims, and how can you protect your business from them?

3 Kinds of property damage risks covered by Contractor Liability

  1. Job-site risks 

Maintaining strict control over building site operations is imperative and putting effective control mechanisms in place is a must. But the unexpected can happen where one of your employees inadvertently damages the client’s property.  For example, your scaffolding can collapse onto a garden water feature. You can be sued for this property damage.

  1. Product risks

If your company installs guttering for instance and it comes loose one week after installation and comes away from the house. The client can hold you liable for the damage to the product supplied (the guttering) and any damage it caused as a result of coming away from the home.

  1. Damage to landlord property

You are a contracting business owner working from rented premises. Your employees work with welding machines to produce security gates.  A spark from one of the welding machines ignites and turns into a fire causing extensive damage to your rented premises.

In all of the above examples your contracting business will be covered if you have Contractors Liability insurance in place.

Note:  Contractors Liability will not cover intentional property damage.

What if it isn’t your fault?

The owner of the property can sue your contractor business for damage to their property. It can be a car, a patch of lawn, a fence – you get the picture. It may be as a result of your negligence or an unavoidable accident. Even if you believe it isn’t your fault, you may still be held liable.

Note:  You can’t sue your own business for damaging your own property.

So, now you know that Contractors Liability Insurance gives coverage for property damage claims. These are incidents where a third party’s stuff is damaged in the course of the contractor’s work. However, this is not the only benefit that comes with Contractors Liability coverage.

2 Other things your Contractors Liability policy protects you against

  • Bodily injury – If a third party is injured as a result of your work, or if they are injured on your property Contractors Liability will help cover the medical costs
  • Advertising mistakes –  Because marketing is not your area of expertise, you may not know that you cannot use another company’s logo in your advertising without their permission. If they sue you, your Contractors Liability will have your back.

Don’t leave your insurance up to chance

Speak to an insurance agent and find out more about protecting yourself and your business from property damage claims. Give your contracting company that extra layer of protection with an insurance package tailored to your specific industry needs.

Avatar for John Brown
Written by: John Brown
John has more than 25 years of experience in the insurance industry. He grew from a star insurance producer to owning one of the largest agencies in the country; he's a reference regarding contractor's insurance, commercial insurance, and builders' risk insurance.