Does your business insurance cover it when an employee causes damage?

Last updated on December 15th, 2023

What if one of your employees accidentally causes major damage while on the job? Our video ad below shows a worker stocking shelves in a gourmet grocery store, and bang! Precious product destroyed, just like that. However unfortunate, these things happen when you’re running a business. This example shows how important it is to have business insurance to handle the unexpected.

Are you covered for this kind of damage to company property or not? What is your liability as an employer in such situations? We’ll answer that question by explaining the basics of business insurance and giving examples of other types of incidents it can cover. That way you can tell if you have all the coverage you need to run your business worry-free.



When you choose the right business insurance, you get solutions perfectly suited to your specific situation. A grocery store and a beauty salon aren’t insured the same way. Different commercial activities mean different risks. We understand that when you’re a business owner, time is money. This is one area where the time spent making a good decision could literally pay off. It will save you financial loss and added stress if something happens.

Property losses: Damage caused by an employee

Your company’s property is very valuable. In the video below, it only took a few seconds for unsold inventory to go up in smoke (or liquid, in this case!). Are you covered for employee-caused damage like this? Let’s take a closer look.

Your company property

Your company’s property includes everything from computer equipment to merchandise to your building. Draw up a list and you’ll see that you could be in for a hefty bill if something were to happen. To avoid unpleasant surprises, make sure you have enough insurance to cover everything. Be aware that coverage for your company property is often included in your basic business insurance policy.

This is the coverage that would apply in a scenario like the one in our ad. The employee didn’t mean to cause the damage, and he was doing his job when it happened. If the same thing happened in your business, you’d be covered for the property loss according to the terms and conditions of your insurance contract. It’s the employer’s and business owner’s responsibility to take out property insurance because it’s entirely possible for an employee to cause accidental damage on the job.

Damage and injury to others

Let’s look at other examples of when an employee causes damage at work, but to other people or businesses. What if a customer had been standing near the shelves when they collapsed? What if one of your delivery people damaged the premises of another company while on a delivery? What is your liability as an employer in these kinds of situations? Will business insurance cover it or not?

The list of what-ifs could go on and on—and not just scenarios involving employees. What if a display falls on a customer? What if someone slips on an uncleared patch of ice at the entrance to your store? What if property belonging to the owner of the building you rent is broken?

As you can see, there are many cases where your business could be held liable for bodily injury or damage to others’ property. That’s why third party liability insurance is an absolute must. Like property insurance, it is included in the basic business insurance policy.

Other types of business insurance coverage

Since business insurance damage can take many forms, there are many types of coverage. Note that basic coverage also includes fire and, on most policies, theft. There’s also business interruption insurance, which covers income lost over a selected period of time following a loss. In some cases, this could literally save your business!

There are of course riders you can add to the basic policy. Two of the big ones cover losses due to flooding and earthquakes. There are also à la carte options you can add that are tailored to your business and the specific risks it faces. To make sure you’re making an informed decision, talk to a business property insurance representative who can offer advice and guide you through the process.

At Promutuel Insurance, we offer business insurance tailored to your needs and business sector. Our representatives are THERE with solutions for you as a business owner. And remember—you’re automatically covered against any equipment breakdown, no matter what type of coverage you select!