In today’s world of frivolous lawsuits and jury awards being at an all-time high, there are not many who can afford to be without casualty insurance. More commonly known as liability insurance, this very important coverage exists to protect you financially if you are accused of wrongdoing that caused injury or property damage to another person.
There are many different types of casualty insurance, and depending on your situation you likely need more than one.
Automobile Liability. The liability portion of your personal auto policy is intended to protect you in the event you are responsible for causing injury or property damage while operating a covered automobile. Most states have minimum liability requirements and being caught driving without sufficient coverage or with no coverage at all could result in hefty fines or losing your driving privileges altogether.
Personal Liability. This type of casualty insurance is usually attached to a homeowner or renter’s insurance policy and is intended to protect you if someone other than a family member residing in the home is injured on your property or in the event you cause unintentional damage to another person’s property. The injury does not have to have happened on the insured premises. Personal liability insurance also extends to covered incidents that happen away from the premises.
Personal Liability Umbrella. A liability umbrella policy adds another layer of liability protection over your home and personal auto policies. Imagine an automobile accident caused by you or another family member that results in serious injury or death of several people. Would your automobile liability limits be enough to cover the potential jury awards for a tragedy of this size? Once the limits of the underlying policy are exhausted, the umbrella policy will respond and pay up to the limits of the policy.
Commercial General Liability. This coverage protects businesses when a person is injured on the premises or property damage is caused as a result of the operations of the business. Slip and fall claims are one of the most frequent types that general liability covers.
For example, a contractor installing a new roof at a residence fails to cover the roof overnight and it rains, causing damage to the interior of the home. The liability coverage would pay for the property damage caused by the contractor’s negligence. In another instance, the same contractor leaves a ladder unattended and a small child climbs up the ladder and falls off resulting in an injury. The contractor was negligent in leaving the ladder up and the policy would respond if compensation is sought for the injuries suffered by the child.
Professional Liability. Also know an Errors & Omissions (E&O), this coverage protects businesses or individuals when they cause injury to a person as a result of or while performing their professional services. There are many different types and levels of this insurance.
These are just a few examples and the need for this coverage is not limited to these professions. There are many others that are not fully protected without it.
Workers’ Compensation. This protects employees who are injured on the job regardless of the cause. This coverage strictly protects the employer who is accused of wrongdoing. Workers comp is required by almost all states for any non-owner employees. Many workers compensation policies include employers liability coverage.
Employer’s Liability. Sometimes referred to as Stop Gap insurance, it protects an employer in the event an employee is injured on the job and claims the employer’s negligence contributed to the injury and sues. It also does cover third-party liability. This could be due to anything from a failure to provide a safe working environment to intentionally putting the employee in harm’s way.
Employment Practices Liability Insurance (EPLI). EPLI protects an employer if they are sued for unfair labor practices by a current or former employee and could include sexual harassment, wrongful termination, age or racial discrimination, or civil rights infringement. All employers should have this coverage but especially those with 10 or more employees and those with a high turnover rate, such as restaurants and bars, and those that are perceived to be discriminatory in nature.
Liquor Liability. This coverage is specific to establishments that serve or sell alcoholic beverages. It provides protection in the event the establishment is sued for wrongful death or injury as a result of the consumption of alcohol sold or served, and whether consumed on the premises or not.
An establishment, its owner, or an employee might be accused of over-serving a patron or serving to a minor that directly led to an injury or death. Liquor liability is excluded on most* other types of casualty policies, so without it, there would be no coverage for incidents related to the consumption of alcohol. *Note – some policies may have limited liquor liability coverage for “host” serving of alcoholic beverages. “Host” refers to providing alcohol for consumption at an event, social gathering, or in a person’s home.
Commercial Liability Umbrella. Similar to a personal umbrella, a commercial liability provides an additional layer of liability limits over the underlying casualty policies. Coverage limits generally start at $1,000,000 with higher limits being available in most cases, for an additional premium. Once the limits of the underlying policy or policies have been exhausted, the umbrella policy will respond to pay any additional amounts, up to the policy limits of the umbrella.
We hope this article on the types of casualty insurance has been informative. Casualty is a category of insurance coverage the protects the insured against loss of property, damage or other liabilities.
