What Is Casualty Insurance?
Casualty insurance is a large type of insurance that protects individuals, corporations, and employers from property loss, damage, and other obligations. Vehicle insurance, liability insurance, and theft insurance are all examples of casualty insurance. Losses that occur as a result of the insured’s dealings with people or their property are known as liability losses.
It’s critical for homeowners and car owners to get casualty insurance since damage can be costly. Casualty insurance, in addition to vehicle and liability insurance, has traditionally been used to represent a variety of other types of insurance, including as aviation, workers’ compensation, and surety bonds.
How Casualty Insurance Works
Casualty insurance, like property insurance, shields you from financial loss if you are legally liable for another person’s injuries or property damage. To be held legally accountable, one must have shown negligence, or a failure to use sufficient caution in one’s personal activities. If someone is harmed as a result of someone else’s negligence, the offending party is responsible for the damages.
Liability losses are commonly referred to as third-party losses in the insurance industry. The first party is the insured. The second party is the insurance company. The third party is the individual to whom the insured is accountable for damages.
Depending on what you do, you should consider a few different types of casualty insurance if you operate a business. Workers’ compensation insurance is an important sort of casualty insurance for businesses because it protects them from liabilities that emerge when a worker is hurt on the job.
Cyberfraud, employee theft, and identity theft plans are also offered (to name a few). Check to see if your policies cover your website if you do most of your business online. If you rely on computers to run your business, you may want to consider insuring them separately.
Casualty Insurance for Individuals
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.
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.
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.
- 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.
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.
Commercial Liability Umbrella: 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 do I file Casualty Insurance Claim
The claim process differs depending on the insurer. If you’re at blame for the damage or injury, the other party will often file a claim with your insurance. Casualty claims for your home and car normally don’t have a deductible, so your insurance will cover all costs up to your policy limits for approved claims.
You’ll very certainly work with the other person’s claim representative or insurance adjuster if you were injured or suffered property damage. Your claim could be paid directly to you or to a third party, such as a collision repair business.
Car insurance companies use police reports, photos, details gathered from you and the policyholder, and more to determine who is at fault and whether a liability payout is due. For any insurance claims involving injury, it’s crucial to gather as much evidence as possible to support your claim, such as immediate medical evaluations, photos and videos of what caused your injury, and witness statements.
If the issue is with a homeowner and they have no-fault medical coverage, you may be able to submit bills directly to their insurance company without needing to file a claim first.
- Casualty insurance pays for another person’s injuries and property damage when you’re found legally liable.
- Insurers only pay up to your liability limits, so you’re responsible for costs beyond those amounts. Umbrella insurance can help pick up the tab for excess amounts. It’s purchased as a separate policy.
- You’re only required to carry your state’s minimum liability limits on your auto policy, but consider getting as much home and auto casualty insurance as you can reasonably afford for greater financial protection.
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