Yes, a commercial general liability insurance also covers property damage. A typical commercial general liability insurance helps in covering losses or damages which may arise due to bodily injury or property damage for which your business may be responsible for paying. Overall, a commercial general liability insurance offers coverage in case of bodily injury and property damage for which your business may become liable.

Under commercial general liability insurance policy, third-party losses or damages are also covered. It comprises of repair, renovation and replacement cost in the case where the accident or loss happens. Further, general liability insurance also makes payment to restore the building if it is damaged or destroyed due to accidental fire happened in your premises.

Here, it is essential to note, that the commercial general liability insurance policy will cover the property damage only if they don’t happen after the expiry of the policy tenure. Also, a claim with regards to property damages should be made with the insurance company during the policy tenure or any extended period as stated in the policy document.

Further, it is necessary for the policyholder to inform the general liability insurance company about any loss or damage happen to property damage as soon as the claim is filed against the insured. Also, in any case, the policyholder can’t pay compensation to the third-party on its own after the property loss or damage and later approach the insurer for the reimbursement of the same.

Case: 1

Since 2011, R.S Property has its office situated in Pune, Though, the company takes every precaution to avoid an accident during work, it has also bought a commercial general liability insurance to get coverage in case something goes wrong.

Read more: What are the different types of liability insurance?

Last year, the company had to face a major loss when the fire erupted in its office due to short-circuit. Soon the fire spread and engulfed the nearby shop as well. The fire caused severe damages to the nearby shop. The owner of the shop filed a case against R.S Property and asked for the compensation for the financial loss that it had to incur along with the cost incurred in repairing the shop.

As R.S Property had a commercial general liability insurance policy, it approached the insurer for the claim settlement. Here the insurer conducted an investigation and found that the shop got damaged due to fire occurred at R.S Property’s workplace, and therefore, the shop-owner was liable to get the compensation.

Commercial general liability insurance company asked for various documents, like a duly filled insurance claim, a complete account of the business, etc.; and agreed to settle the claim as per the sum insured.

Please note, here the losses happened to the nearby shop, however, commercial general liability insurance company still agreed to settle the claim. As commercial general liability insurance also covers property damages, this particular claim fell under the purview of the policy and therefore, it was settled by the insurer.

Case: 2

L.S Engineering has its office in Mumbai. Last year, it opened a new office in Delhi. When the new office was under-construction, one of its pillars fell and damaged the nearby office of the software company. The owner of the software company approached L.S Engineering for the settlement of losses.

Read more: What is a Commercial General Liability Insurance?

As L.S Engineering had a commercial general liability insurance, it approached the insurer for the settlement of the claim. The insurer asked for details like duly-filled claim form, a complete account of the accident, etc. After an investigation, the insurer found that the software company had to incur heavy losses due to fall of the under-constructed pillar and therefore, L.S Engineering was held liable to pay compensation.

As commercial general liability insurance covers losses or damages caused to property, here, in this case, the insurer covered losses or damages which the software company had to incur due to the accident which took place at the site of L.S Engineering.

The commercial general liability insurance company settled the claim as per the sum insured stated in the policy.