A single question decides which insurance world you're in: whose assets did the damage occur to? If it's your own – that's a property insurance matter. If it's someone else's, and you caused it – that's a liability insurance matter. This key article draws the line between the two worlds, because in practice this is where most confusion arises.
- Own damage (machinery, tools, stock, premises): property insurance – the territory of vagyon.biz.
- Damage caused (to someone else's person or property): liability insurance – the subject of this site.
- Both often show up within a single loss event – which is why it's worth planning the two covers together.
The same fire, two separate matters
Picture a workshop fire that spreads to the shop next door. The loss from the business's own burnt-out machinery and stock falls under its property insurance. The damage to the neighbouring shop, though, is a liability matter: the injured party takes action against the business, and liability insurance responds, under its terms. One event, two policies, two separate claims. Anyone who takes out only one of the two covers is protecting only half the picture.
Where the two typically get mixed up
There are three situations where the two worlds most often get tangled up. First: rented equipment – borrowed scaffolding or a hired machine isn't your own asset, so damage to it can be a liability matter, though many policies treat it separately (on a tenant's/hirer's liability: separate article). Second: someone else's item being worked on – a client's piece of furniture you happen to be working on typically falls outside general cover or needs a separate extension; this is a recurring point in tradesperson policies. Third: your own defective work – fixing your own faulty work is neither a property loss nor a liability loss, but a business risk (what's covered and what's not).
Why is it worth planning them together?
Because the risks go hand in hand too. The same activity assessment forms the basis for both covers, and our downloadable data form is a joint one: it asks for both business property AND liability insurance information. The vagyon.biz site covers the property side in detail; the portfolio article covers the full company-portfolio view – so the covers fit together without gaps or overlap.
Quick self-test
If you're unsure, classify a loss event like this: 1) Whose assets did the damage occur to? 2) If someone else's: did your work, your product or your operations cause it? 3) If yes: do you have liability cover whose list of insured activities includes this particular work? The third question is the most important – it's worth talking through at a free consultation.
The practical test: the inventory method
To work out whether both sides of your cover are in order, put together a ten-minute inventory. Left column: your own assets – machinery, tools, stock, premises, vehicles; this is the checklist for the property side. Right column: other people's assets that your work comes into contact with – clients' properties, equipment you handle, passers-by, a client's finances; this is the map of the liability side. The two columns call for two separate families of policy, and the most common mistake is that only one of them exists: a tradesperson has property insurance for the workshop but no liability cover – or the other way round. The full picture is the two together; the fit is worth thinking through – I can help with this at the consultation.
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