Does General Liability Cover Water Damage?

A business operation that accidentally causes physical damage to a customer’s or other third party’s property can present a CGL Coverage A claim. Triple-I gives an example of a contractor accidentally leaving water running and damaging a customer’s home. That illustrates the kind of third-party claim the coverage can address; it does not guarantee coverage for every leak, flood, plumbing failure, or defective installation. Care, custody, and control wording, the damage-to-your-work exclusion, and the cause of loss can matter.

If water damages your own building, stock, or equipment, look to the commercial property policy and its covered causes of loss, exclusions, and endorsements. Check whether a water event is sudden and accidental, seepage over time, sewer backup, flood, or damage arising from work you performed; those facts can lead to different policy treatment. Read the CGL and property forms together and ask the insurer to explain any water-related limitation in the quote.