Difference Between Commercial Property & Casualty Insurance
Property and casualty insurance are often sold together in a lumped business policy called property casualty insurance. However, each type of insurance covers very different aspects of a business. Even though they usually are purchased in tandem, business owners should understand what each covers and how they protect the business.
Commercial property insurance covers your buildings and the contents of those buildings -- including inventory, equipment and other assets -- in the event of a loss. This coverage is important for businesses because it provides protection against losses from theft, accidents and other causes. Premiums will vary depending on whether the policy reimburses the cost of replacing lost items or simply provide cash value of items at time of loss. Replacement cost coverage premiums will be higher, but may help a business get back to operating as normal more quickly.
Commercial casualty -- or commercial liability -- coverage provides protection to a business against lawsuits for injury, property damage or negligence caused by the business. Most lenders and others with financial stake in a business require the business to have casualty coverage. Casualty insurance will protect a business if a customer gets hurt on the property. Examples would include a customer falling on a wet floor or something falling on a customer. The insurance would cover medical payments, legal expenses and settlement costs up to the limits of the plan.
Property and casualty insurance are often combined because most businesses need both types of coverage to be adequately protected and meet requirements of outside stakeholders. Insurance companies provide packages to simplify the insurance-buying process for business owners.
Workers' compensation insurance covers medical expenses and some lost wages for employees injured on the job. Most states require businesses with employees to purchase workers compensation insurance. An umbrella liability policy can be a cost-effective way to add a layer of protection to existing policies. A single umbrella policy allows a business to increase liability coverage for casualty, workers' compensation and auto liability policies without increasing the liability component of each individual policy. Businesses who primarily provide professional services -- architects, engineers, accountants and technology service professionals -- also should consider professional liability coverage. Professional liability protects the business against lawsuits related to financial loss caused by services provided.