Under the umbrella of property insurance lies a category called property casualty insurance. Sold by directly by insurance companies, or by way of agents and brokers, property casualty insurance offers two lines of coverage – personal and commercial – to insure items such as automobiles, business equipment, fidelity and legal expenses. The “property” and “casualty” areas bring different coverages under this one policy.
The property portion protects a business, or person, by covering the expenses that result from the loss of or damage to various kinds of property. This can include property that, if damaged or destroyed, would affect the business owner's income. For example, if a business owner’s computer malfunctions, the cost of repair or replacement is covered.
The casualty portion of this insurance protects a person or a business from legal liability that stems from the damage a person causes to someone else’s property; loss of someone else’s property or injury to others. For example, a visitor to a home-based business may injure himself by slipping on the stairs in the house and casualty insurance will protect the policyholder in the event of a lawsuit.
A person with a home-based business may want to consider adding property casualty insurance to a homeowner policy because there is often very little coverage on a standard homeowner's policy for business operations inside a house. According to the Insurance Center of Central Florida, coverage may only be up to $2,500 under a typical homeowner’s policy. If an incident with a customer or a fire were to occur at the home, the business operator would only receive a little bit of money to cover the costs in comparison to the value of the damage.
The cost of property casualty insurance is determined by market conditions. A soft market means there is competition, and prices are generally lower. In early 2011, it was predicted that the market would be soft for the year because fewer claims were being made, thus increasing competition for clients. When the number of claims rises, competition for business decreases, creating a hard market and an increase in premiums.