Throughout the time a business is in operation, it is likely to be impacted by minor to major weather events, such as a natural disaster. While business owners may be aware of whether their policies cover major unexpected weather events, many may not consider the impact of weather events over time. Because of this, property owners must have a good understanding of whether or not commercial property insurance covers wear and tear on the premises.

Commercial Property Insurance and Wear and Tear

Owning any type of property comes with the responsibility to maintain it. Everything from landscaping to ensuring the roof is in good working condition are all responsibilities taken on once the property is purchased. However, certain instances of wear and tear can easily go undetected. When this happens, it is not uncommon for commercial property owners to wonder if this type of deterioration will be covered under their commercial property policies. 

In short, instances of wear and tear are most commonly not covered by commercial property insurance. Policy exclusions for wear and tear damage to a property are designed to protect insurers from being held liable for damage occurring due to a policyholder’s failure to maintain, repair, and replace any defective or deteriorating portions of the property. Thus, it is the policyholder’s responsibility to ensure their investment is well maintained year-round to avoid any potential damage that could arise due to wear and tear. This can be difficult as there aren’t always clearly defined standards as to what constitutes wear and tear. 

For instance, if a business has a roof over 10 years old that has not been maintained or repaired, it could easily begin leaking and cause damage to the contents inside the property. Because the damage is the result of the owner’s failure to maintain the roof, an insurance claim would likely be denied as it would be considered wear and tear. On the other hand, if the same roof had been regularly inspected and maintained by a roofing company and a windstorm damaged it, the policyholder would be able to prove the damage was the result of a covered event. 

While this may seem straightforward, it can quickly become complicated. Insurance companies often rely on insurance adjusters or building engineers to evaluate property damage claims. In certain cases, these experts may not agree with each other as to whether or not wear and tear was present on the property. 

Additionally, insurers often cite wear and tear as the cause of damage to avoid having to pay a claim. This is unfortunately common in cases of windstorms or flooding, as insurers will attempt to invoke wear and tear and blame the damage on a preexisting condition.

Wear and tear damage exclusions are incredibly common in nearly all commercial property policies. Even within an all-risk policy, the named exclusions and limitations defined will ultimately determine if a property loss is covered. Insurance companies may claim that poor maintenance, prior damage, manufacturing defects, and/or faulty installation e contributed to wear and tear and thus be excluded from coverage. Other common commercial property policy exclusions include:

Insurance Coverage Attorneys 

Damage to commercial property is inevitable; however, keeping an eye out for wear and tear can help better protect your business from a major disaster or weather event. Unfortunately, it is all too common for insurance companies to cite wear and tear damage in response to a claim in order to benefit their own financial interests. When this happens, the policyholder should contact legal counsel.

At Raizner Slania, our insurance coverage attorneys have extensive experience combatting bad faith tactics. This includes violations committed by insurance companies that falsely claim valid property damage was preexisting and/or the result of wear and tear. If your commercial property insurer is attempting to deny a valid claim due to the citing of wear and tear damage, we can help. Contact our office today to see how we can best assist you.

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