What does 'property damage' refer to in commercial property insurance?

In commercial property insurance, 'property damage' specifically refers to physical injury to tangible property. This includes any damage that affects the physical structure of buildings, equipment, inventory, and other materials owned by a business. The coverage provided by commercial property insurance is designed to protect against losses resulting from such damage, ensuring that businesses can repair or replace their physical assets after an incident like a fire, storm, or vandalism.

This definition is critical because it highlights the focus of the insurance policy on the physical aspects of property rather than intangible elements. Understanding that property damage is concerned with tangible items helps businesses recognize the importance of maintaining adequate coverage to safeguard their physical investments. The coverage does not extend to financial impacts directly linked to other types of loss, such as income or losses caused by theft, which are addressed through different types of insurance policies.