What is property & casualty insurance?
Property and casualty insurance (P&C insurance) provides protection from risk in two areas – first party coverage for protection against damage to physical items such as buildings (including the contents, stock, and equipment within them) and owned vehicles, and secondly, third party coverage protection against legal liability for bodily injury and damage to property to a third party arising out of a business’ operations or products.
What are the main types of property and casualty coverage?
There are several insurance products offered to businesses to help them protect their organizations from risk. The core types of insurance policies include, but are not limited to:
- Auto liability insurance: protects against legal responsibility to others for bodily injury or property damage, and cost of treatment for injuries arising out of use of an auto.
- General liability: protects against loss as the result of bodily injury, property damage, medical expenses, libel, slander, and the cost of lawsuits arising out of a company’s operations or products.
- Workers’ compensation: provides medical and rehabilitation costs and lost wages for employees with illnesses or injuries resulting from job-related duties.
- Commercial property: covers damage of company property due to events such as fire, flooding, or storms. Lost revenue while business is interrupted due to damage can also be protected by this coverage.
- Umbrella liability: provides increased protection from catastrophic claimsabove and beyond the existing limits of underlying insurance policies (typically $1,000,000).
- Product recall: protects against costs associated with removing a defective product from the market that has caused or may cause injury or bodily harm.
- Pollution liability: protects against bodily injury or property damage to a third party and clean up expenses resulting from pollution.
- Cyber liability: provides coverage for costs and expenses associated with a business failing to protect personally identifiable information of a patient or customer.
- Crime: provides coverage for loss due to employee theft.
- Professional Liability (Errors & Omissions): protects against financial loss of a third party due to wrongful or negligent acts in the performance of a defined professional service (accounting; engineering, etc.).
- Management liability: is a combination of the following insurances:
- Directors and officers liability (D&O): protects directors and officers of companies from financial losses resulting from alleged or wrongful acts.
- Employment practices liability: protects against claims by workers that their legal rights have been violated by their employer.
- Fiduciary liability: protects businesses against legal liability arising out of their role as fiduciaries in the administration of a pension or welfare plan.
Does P&C insurance coverage have exclusions?
The specific terms and conditions for each particular line of coverage are detailed in the insurance policy. It is important to read the policies carefully. All policies have exclusions and as a result you may need to augment an existing policy with another type of policy to ensure there are no gaps in coverage.
Who should purchase P&C insurance?
Every business should have a property and casualty insurance program because every business is exposed to risk. The first step to learning what types of property and casualty policies are right for your business is working with a broker to identify and assess the risks facing your business. A businesses’ risks are constantly changing, and therefore, a business operator is wise to review their property and casualty insurance program with their broker on an annual basis.
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