A vessel is involved in a casualty. The cost of property damage includes the __________.

Correct Answer: Option B — cost of labor and material to restore the vessel to the service condition which existed before the casualty

46 CFR § 4.03-5 specifies that reportable property damage is limited to the actual cost of labor and materials necessary to return the vessel or property to its service condition prior to the casualty. This definition excludes indirect financial impacts such as loss of revenue or legal damage claims.