Property vs Casualty Insurance
Business owners often face several types of risks apart from the risk of incurring a loss. As a result, it is crucial for owners to protect themselves and their business against any eventuality that can potentially compel them to shut shop. This is where insurance policies can come in handy. Property and casualty insurance policies are two of the most commonly opted-for insurance policies by business owners across the globe. However, to get the right coverage for you, it is important to understand the difference between property and casualty insurance policies.
Property vs casualty insurance policies: What is the difference?
Property and casualty insurance offer different forms of coverage and are used to serve distinct purposes. To help you gain a better understanding, here is a closer look at the differences between these two insurance policies:
Property insurance provides financial cover for ’properties‘ that are owned by a company such as real estate (office building or factory), equipment, and assets present in the inventory. A property insurance policy covers the assets owned by the company against many natural and man-made calamities. Do note that a property insurance policy does not cover the damages that are caused due to the regular usage of the property
On the other hand, casualty insurance covers you against lawsuits and claims that are made by a third party. For instance, if a third–party files a lawsuit against your business for causing them bodily injuries or for damaging their property, a casualty insurance policy can help you cover the expenses that are involved in fighting this lawsuit. It is important to note that casualty insurance will not cover the loss of your property
Assets owned by a business usually have a very high value. Hence, if they are stolen or damaged due to fire or any other such reason, it can be quite difficult for a business to bear such losses. Getting a property insurance policy can help you avail financial support in such dire situations and avoid business interruption while you fix the problem. While it is not compulsory to buy a property insurance policy, it is considered to be good practice to invest in one. You can opt for property insurance to protect commercial property as well as personal property
Lawsuits can be quite costly to tackle as well. Whether they are made due to legitimate claims or not, paying the lawyer‘s fees along with a range of other charges can burn a hole in your pocket. This not only hampers your revenue but also tarnishes the image of your company. As such legal matters can arise without notice, it can be quite difficult to have enough money to help you tackle the lawsuit. This is where a casualty insurance policy can come in handy. Once your claim has been approved, the casualty insurance provider will pay the lawyer‘s fees, court fees, and any other charges that are a part of the lawsuit. Many loan providers present in the market today require businesses to have a casualty insurance policy in order to process their credit requirements. In fact, as per the Public Liability Insurance Act, 1991, it is mandatory for business owners to get a public liability insurance policy (a type of casualty insurance policy). If your business deals with customers or works on a contractual basis with other businesses, it becomes quite important to get yourself a casualty insurance policy
What are the different types of property insurance policies?
There are many different types of property policies available in the market today
Fire insurance policy
This is a type of property insurance policy that specifically covers damages that are caused to your assets due to a fire
Burglary insurance policy
This is a type of insurance policy that provides you compensation if the property owned by your business is stolen. Apart from the stolen items, this insurance policy will also provide you compensation for the damages incurred to your property due to theft or burglary
All risks insurance policy
All risks insurance policies provide you compensation for the loss of jewellery or moveable equipment
Marine cargo insurance policy
A marine cargo insurance policy offers financial coverage for the loss or damage of goods during transit by rail, road, air, water, registered post, or courier
Mechanical breakdown insurance
Mechanical breakdown insurance covers machinery that are used in your company against breakdown due to sudden physical damage(s).
Renter‘s insurance policy
Insurance covering your property against theft or damage caused to your belongings in a rented apartment is called a renter‘s insurance policy. It also provides compensation for the theft or damage of belongings that are kept in a storage unit
What are the different types of casualty insurance policies?
The various types of casualty insurance policies available in the market today are:
Commercial general liability insurance policy
A commercial general liability insurance covers you against lawsuits made by a third–party when they suffer a property loss or personal injury due to your business operations. It also covers you against employee injuries and casualties.
Public liability insurance policy
A public liability insurance policy provides you liability coverage against lawsuits that are filed against your business by a third-party who has sustained bodily injuries or loss of property in your business premises
Pollution legal liability
This is a type of casualty insurance policy that is recommended for chemical companies or industries that have a high output of waste. It covers clean-up costs, property damage, and environment-related liabilities
Employee‘s compensation insurance policy
The worker‘s compensation insurance policy covers a business owner against the compensation that they need to provide in case of a worker’s death, injury, or disability caused during the course of employment
Points to keep in mind
While property insurance covers the assets of a company, casualty insurance covers the owner of the company
The extent of insurance coverage offered by property and casualty insurance policies can vary between insurers
While property insurance can be bought by anyone, casualty insurance is typically only bought by business owners
Since property and casualty insurance policies serve different purposes, it is better for a business owner to get both these insurance policies as it can help them to efficiently mitigate business risks
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale