Introduction to Property & Casualty Insurance
Property and casualty insurance is a specific type of insurance that helps cover owners from various financial problems that can occur when accidents happen on or around what they own. This type of insurance is not like hazard insurance which protects property from fire and other disasters: Instead, it is used to help people prepare for more legal-oriented issues.
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Definition
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Property and Casualty insurance is a type of coverage purchased by both homeowners and business owners. It insures houses, cars and business entities. The insurance is designed to protect all those with a specific interest or investment in these key assets, people who wholly or partially own them. It rarely covers anyone else, and is generally focused on only certain key assets.
Purpose
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Property and casualty insurance has one main purpose: It protects policyholders against lawsuits. While other types of insurance help replace objects after disasters or accidents, the accidents can also harm employees and customers who may be near them. These employees, customers and any other third parties, may be able to sue the person or business simply because they owned a component involved in the accident. The insurance protects owners from any problems.
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Liability
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Liability is a key part of property and casualty insurance. For many businesses, the insurance is actually called liability insurance, which may be a more accurate title. Liability refers to the person who is responsible for a specific action or event. Lawsuits can hold up in court if they are directed at a person who is actually liable for the accident: This liability issue can be complex, and rather than spend money defending themselves in court, some prefer to use property and casualty insurance to pay for it instead.
Commercial vs. Personal
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Commercial and personal property and casualty insurance are different from each other, and generally cover different things. The commercial version of the insurance covers automobiles, equipment breakdowns, crime and electronic processes. Personal insurance covers things like automobile insurance, dwelling property and watercraft.
Excess Policy
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There is also a type of insurance known as excess or umbrella insurance. This policy covers business owners if the courts award damages that go beyond normal hazard insurance, and is more common with larger companies.
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References
- Photo Credit finance #3 image by Adam Borkowski from Fotolia.com
