Casualty insurance is a broad category of insurance coverage for individuals, employers, and businesses against loss of property, damage, or other liabilities.
It covers you if you’re legally responsible for another person’s injuries or property damage, such as from a car accident or an accident in your home. Below, we take an in-depth look at what casualty insurance is, how it works, who files the claim, and whether it’s worth getting or increasing your coverage. You can checkout our best Pet insurance companies in US
Casualty insurance means that the policy includes liability coverage to help protect you if you’re found legally responsible for an accident that causes injuries to another person or damage to another person’s belongings.
Liability losses are losses that occur as a result of the insured’s interactions with others or their property.
Casualty insurance protects you when you’re liable for someone getting hurt or their belongings getting damaged.
The circumstances in which you’re covered depend on the specifics of your policy. For instance, a car insurance policy might pay to repair a neighbor’s fence after you drove into it.
For homeowners or car owners, it’s important to have casualty insurance as damage can end up being a large expense.
Types Of Casualty Insurance
Casualty Insurance for Individuals
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.
This type of casualty insurance is usually attached to a homeowner or renter’s insurance policy
It 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.
Casualty Insurance for Businesses and Professionals
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.
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.
- Medical and legal professionals carry professional liability insurance, also known as malpractice insurance.
- Architects and designers need professional liability insurance in the event one of their designs fails and causes injury or property damage.
- Daycare centers and nursing homes need professional liability in case they are accused of abuse or neglect.
- Real estate agents, insurance agents, and financial professionals need it in case of an error or omission that causes a monetary loss to a client they represent. Checkout guide to home owners insurance in UK
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.
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.
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.
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.
How Casualty Insurance Works
Just as you can purchase property insurance to protect yourself from financial loss, liability insurance protects you from financial loss if you become legally liable for injury to another or damage to property.
To be legally liable, one must have demonstrated negligence the failure to use proper care in personal actions.
If negligence results in harm to another, the offending party is liable for resulting damages. People in the insurance industry often call liability losses third-party losses.
The insured is the first party. The insurance company is the second party. The person to whom the insured is liable for damages is the third party. checkout UK property insurance
Some of the insurance companies in UK are the following
NFU Mutual- Financial Services
Direct Line Group
RSA Insurance Company