So what is the difference between property and casualty insurance? This often asked question has to with legal liability for bodily injury and property damage to others (casualty) & damage to the insureds building or contents (property).
Difference Between Property And Casualty Insurance
Property and casualty insurance are so closely related, many company owners do not know they are two separate types of policies covering two very different things.
Understanding the difference between property and casualty insurance can help you make more empowered and informed decisions about your insurance needs.
While speaking with an agent is always advisable, many company owners find they are more comfortable with their insurance coverage when they have done some research into the market themselves.
What Is Property Insurance?
Property insurance covers all buildings owned by your company as well as their contents, including inventory, assets, equipment, and employee belongings. These policies apply in the event of loss, theft, fire, or other disaster.
It is crucial to obtain this type of coverage as soon as you begin operating. Without it, you may be personally liable for any damage that occurs, as well as for the replacement of anything lost, damaged, or destroyed. This can create a huge economic burden for company owners, forcing many to close their doors. Under standing the difference between property and casualty insurance and buying the right policy guarantees you can stay open while you address the situation.
When looking for commercial property insurance, make sure you read the policies carefully. Not every company has the same standard terms and coverage. You need to be sure that the policy you purchase covers each one of your buildings, all equipment, and employee possessions. Inadequate coverage could lead to lawsuits later on.
What Is Casualty Insurance?
Casualty insurance is also sometimes known as liability insurance. It does not protect your buildings or assets. Instead, it offers you coverage in the event you are sued or threatened with a claim from a third party for bodily injury or property damage. The most common type for business is commercial general liability.
Almost any bank or other reputable lender require all companies they do business with to have this type of policy in place, making it one of the first ones you should invest in. Without it, you may have a hard time getting financing or even qualifying for other types of insurance.
This type of insurance also protects the company's owners, directors, and officers from personally being held liable for any damage or injury done to a third party. This includes customers who get injured on your property or who were hurt as a result of your company's actions. Any company that does business with third parties, including those that contract with other businesses, need to have casualty insurance in place.
Lawsuits can quickly deplete company and private resources, especially if the case goes to court. These policies offer coverage for legal fees, court fees, and settlements and other payouts. You do not need to risk your own assets or the continuing operation of your company as long as you invest in a plan that provides casualty coverage.
What About People Who Work From Home?
Now more than ever, people are working from home. In some cases, these individuals are still working as employees of a business and may be covered by the company's extended policies. However, if you are self-employed, you should consider investing in additional policies. This includes knowing the differences between The difference between property and casualty insurance, and seeing what other policies you need beyond your existing homeowner's or renters insurance policy.
Most homeowners insurance policies do not extend to the parts of your home where you conduct business, nor do they cover your equipment and inventory. If there is a fire or theft, you are on the hook for those items, not your insurance company. This makes having property insurance crucial.
You should also make sure you invest in a casualty insurance policy, even if you do not have clients visit you on site. Damages can still happen as a result of your work off-site. For example, you could be sued for copyright infringement or your product could malfunction causing damage to your customers.
Make sure you sit down with an insurance agent to discuss your needs well in advance of opening your doors for business to ensure you are not risking your own home and personal assets.
Difference Between Property And Casualty Insurance - The Bottom Line
We hope this article on difference between property and casualty insurance has been informative. Protect your investment in your business, your assets, and your staff by ensuring you have full and comprehensive insurance coverage. Taking the time to research each policy that may apply to your company is the best way to guarantee you can make an informed choice about your insurance needs. You can also contact an insurance agent to learn more about specific policies that may apply given your unique company needs.