You are clearing a hoard in a basement and toss a moldy shoebox into the dumpster. Two days later, the client’s daughter calls screaming that the box contained $40,000 in vintage savings bonds and her grandmother’s platinum wedding set. They are suing you for the full replacement value plus emotional damages, and you are staring at your General Liability policy wondering if “accidental disposal” counts as property damage.
Key Takeaways
- General Liability is for Damage, Not Mistakes: GL covers you if you drop a vase (physical damage). It often excludes “wrongful acts” like throwing away an item you shouldn’t have (negligence/error).
- Errors & Omissions (E&O) is Mandatory: For estate clearers, this is your lifeline. It covers financial loss caused by your mistake (mistaking treasure for trash).
- Inventory Clauses: In 2026, insurers demand a signed “Trash Approval” inventory. If you don’t have a signature signing off on the disposal pile, the claim is often denied automatically by AI claims bots.
- The “Care, Custody, Control” Limit: Even if covered, your policy likely caps coverage for items in your possession at $2,500 unless you have a Bailee Floater.
The “Why” (The Trap): The Definition of Property Damage
I’ve seen this denial letter a dozen times. The adjuster writes: “The item was not damaged; it was discarded. This is an operational error, not a physical occurrence.”
Standard General Liability (GL) is built for accidents like fires or slips. Throwing something away is an intentional act based on a judgment error. That falls squarely under Professional Liability (E&O). If you are an estate clearer operating with only a janitorial GL policy, you have zero coverage for this lawsuit.
The Investigation: Coverage for “Trash Blindness”
I called three carriers specializing in estate and organizers insurance to ask about “accidental disposal.”
1. Westminster (Specialty for Organizers)
- My Analysis: They understand this risk better than anyone.
- The Coverage: Their E&O policy specifically includes “claims arising from the disposal of property.”
- The Limit: Typically $1 Million, but you must keep records.
2. Hiscox (Business Insurance)
- My Analysis: Good for general consultants, but their standard GL excludes this. You must add the “Professional Liability” endorsement.
- The Catch: They may require you to prove the item’s value. In 2026, “sentimental value” is strictly excluded.
3. Basic Janitorial Policy (Next/Thimble)
- My Analysis: I asked the bot: “If I throw away a ring, is it covered?”
- The Answer: No. That is considered a “voluntary parting” or a service error.
Comparison Table: Trash or Treasure?
| Scenario | General Liability | Professional Liability (E&O) | Surety Bond |
| You break a lamp | Covered | No | No |
| You steal a lamp | No | No | Covered (Conviction req) |
| You throw away a lamp (mistake) | Denied | Covered | No |
[IMAGE: Photo of an ‘Itemized Disposal Sign-Off Sheet’ on a tablet]
Step-by-Step Action Plan
- Stop the Dumpster: If the dumpster hasn’t been hauled, pay the driver to wait. Digging it out is cheaper than the lawsuit.
- Check for E&O: Look at your policy. Do you see “Professional Liability” or “Errors and Omissions”? If not, you are self-insuring this loss.
- Update Your Contract: Add a “Hold Harmless for Unidentified Items” clause: “Contractor is not responsible for items inside containers/pockets not inspected by Client prior to disposal.”
- The “Look First” Rule: Never throw away a closed container (envelope, box, purse) without opening it. Period.
FAQ Section
Can they sue for the ‘Sentimental Value’?
They can sue, but insurance only pays “Actual Cash Value.” A photo album is worth the cost of the paper ($5), not the memories.
Does my bond cover this?
No. Bonds cover theft. You didn’t steal it; you threw it away.
What if the client gave me verbal permission?
Verbal means nothing in court. Get it in writing or on video.