Tangible property of others that cannot be used or is less useful because it incorporates your product or work that is known or thought to be defective, deficient, inadequate, or dangerous; or because you have failed to fulfill the terms of a contract or agreement?

• A. Impaired Property
• B. Damaged Property
• C. Depreciated Property
• D. Worthless Property

Answer: (A)

Impaired Property is a defined term for tangible property of others that cannot be used or is less useful because your product or work doesn’t meet requirements, is defective, or you’ve breached a contract or agreement. The scenario described fits this idea exactly: the property’s usefulness is compromised not just by physical damage, but by defects or nonconformance in what you supplied or performed, or by a contract breach. This is different from property that has been physically damaged, which would be described differently. It’s also not a standard term like depreciated or worthless property. So the description aligns with impairment property.