Casualty insurance

Casualty insurance is a broad category that is mostly comprised of liability coverages. It is the liability half of property/casualty insurance. Property insurance covers financial losses that result from damage or destruction of physical assets like buildings or furniture. Casualty insurance covers damages or settlements an insured is obligated to pay because of an accident that injured a third party. Commercial casualty is a category of business insurance that includes various liability coverages.

It also includes a few property coverages that

Coverages Included in Commercial Casualty
There are many types of commercial liability insurance. Here are the ones most commonly purchased by businesses.

General Liability Insurance. This is basic business liability insurance. It protects businesses from claims or suits by customers, clients, and other third parties for bodily injury, property damage, or personal and advertising injury.
Errors and Omissions Insurance. Also called professional liability insurance, this coverage is important for any business that performs a service or provides advice in exchange for a fee. Two examples are medical professional and accountants E&O insurance.
Management Liability Insurance. Is a subcategory of E&O insurance that covers the risks of managing a business. Includes directors and officers liability, employment practices liability, and fiduciary liability coverages.
Cyber Liability Insurance. Once purchased only by technology companies, cyber liability insurance is now a necessity for many types of businesses.
Workers Compensation Insurance. A mandatory coverage in most states. Pays the benefits required by law to employees injured on the job.
Employers Liability Insurance. This coverage is generally included in a workers compensation policy. In monopolistic states, however, it is typically via an endorsement.
Commercial Auto Insurance. Includes commercial auto liability, and other coverages included in a business auto policy.
Excess Liability. Includes commercial umbrella and excess liability policies. Both provide extra limits, but only umbrellas afford broader coverage than primary policies.
Foreign Casualty Insurance. Covers injuries that occur outside the U.S. Includes foreign liability, foreign auto, and foreign workers compensation coverages.
Specialty Coverages. Cover exposures that are unique to certain businesses. Examples are special event insurance, media liability, and entertainer liability
Includes Some First-Party Coverages
Some types of insurance are considered casualty coverages even though they don’t cover third-party claims. An example is commercial auto physical damage insurance. This coverage is actually a type of property insurance as it protects a business against physical damage to property (autos) the business owns. Auto physical damage insurance is classified as a casualty coverage because it is usually provided in combination with commercial auto liability insurance.

There are other types of auto insurance that are considered casualty coverages even though they don’t apply to third-party liability. These include uninsured and underinsured motorist and no-fault coverages. Uninsured motorist (UM) coverage protects you against auto accidents caused by drivers that have no liability insurance. Underinsured motorist (UIM) coverage protects you when the at-fault driver has some insurance, but the limit is insufficient to cover your losses. Both are a hybrid of first and third-party coverages.

They pay damages to the insured for injuries caused by an uninsured driver.

No-fault auto insurance pays benefits to an injured party whether the injured person or someone else caused the accident. While no-fault laws generally allow third-party suits under certain circumstances, no-fault benefits (often called personal injury protection) are paid regardless of fault.

Workers compensation insurance also falls under the category of casualty insurance even though it isn’t really a liability coverage. It pays benefits to workers injured on the job on a no-fault basis. Injured workers need not file a lawsuit against their employer to obtain workers compensation benefits.

Formerly Included
Some types of insurance were considered casualty coverages in the past but are now classified as property coverages. These include commercial crime, and boiler and machinery coverages.

Crime insurance protects a business against loss or damage to physical property, including money, perpetrated by criminals. Examples of crime insurance are employee theft, and money and securities coverages. The old «boiler and machinery» insurance has been expanded and renamed equipment breakdown insurance. It provides protection against loss or damage caused by a breakdown of machinery or equipment, such as a refrigerator or boiler.

Liability Coverages Classified as Property
A few coverages qualify as property insurance even though they cover liability exposures. An example is legal liability insurance. This coverage protects tenants against lawsuits filed by landlords due to accidental damage to the leased property. Legal liability coverage has elements of both liability and property insurance. It covers damages for which the insured is legally liable because of direct physical loss to covered property. For the loss to be covered, it must result from damage caused by an accident by a covered cause of loss (peril).

Like a liability policy, legal liability insurance covers expenses the insurer incurs to defend the insured against a covered lawsuit. These costs, called Supplementary Payments, are covered in addition to the policy limit.

Surety Bonds
A surety bond doesn’t really qualify as either a property or a casualty coverage. Surety bonds are guarantees of performance, not insurance policies. They must be purchased from a surety, not an insurer. Nevertheless, many property/casualty insurers offer bonds through subsidiary companies that operate as sureties.
Property insurance and casualty insurance are types of coverage that help protect the stuff you own — your home or car, for example — and also provide liability coverage to help protect you if you’re found legally responsible for an accident that causes injuries to another person or damage to another person’s belongings.

Couple talking to agent holding red folder.
The following are examples of insurance policies that typically offer property and casualty coverage:

Homeowners insurance may help protect your home and your belongings against covered perils, such as theft or fire. It also typically includes liability coverage, which may help protect you in the event that you’re found legally responsible after someone is injured at your home or you cause damage to someone else’s property.
Learn more about homeowners insurance.

Car insurance may help protect your vehicle — and you — in a few different ways, depending on which coverages you choose. Drivers in most states are legally required to have liability coverage. Additionally, comprehensive and collision coverage may be required by your lender.
Learn more about car insurance.

A man talking on a phone.
An Allstate agent can answer coverage questions and help you find ways to protect what matters most.

Condo insurance may help protect against structural damage to the interior of your unit. Liability protection is usually another component of condo insurance. It’s important to understand what your policy covers versus what may be covered by your condo association’s policy.
Learn more about condo insurance.

If you rent, you’ll likely find that your landlord has an insurance policy to help protect their building and their personal property, but that policy would likely not cover the belongings owned by you, the renter.

Renters insurance commonly helps protect your personal property (furniture, clothing and electronics, for instance). It also typically includes liability coverage if you’re found responsible for damages to someone else’s property or a guest’s injuries in your home. Renters insurance may also help pay for increased living expenses, such as if you have to temporarily relocate if your rented home becomes uninhabitable due to a covered loss.
Learn more about renters insurance.

Boats, golf carts, all-terrain vehicles and snowmobiles are among the vehicles that may be protected by specialized insurance policies. These types of policies generally help cover the vehicle (for instance, if it’s damaged or stolen) and provide liability protection just in case you cause damage to someone else’s property or injure someone else while riding it.
Learn more about power sports insurance.

Landlord insurance may help provide important protections for a property that generates rental income. This type of policy typically helps protect the building you own from certain perils — damage caused by hail or fire, for example. It also usually offers liability protection, which may help cover you if you’re sued following an incident on your property.
Learn more about landlord insurance.

It’s important to remember that, regardless of what type of property and casualty insurance policy you have, coverage limits will apply. Be sure to read your policy or check with your agent to learn about your coverage. Limits can typically be adjusted based on your specific situation.

A local agent can help you determine which types of coverage are right for you. Then you can focus on enjoying your everyday life with the peace of mind that comes with knowing you have the appropriate protections in place — just in case.
Casualty insurance is a problematically defined term[1] which broadly encompasses insurance not directly concerned with life insurance, health insurance, or property insurance.

Casualty insurance is mainly liability coverage of an individual or organization for negligent acts or omissions.[2] However, the term has also been used for property insurance,[citation needed] aviation insurance, boiler and machinery insurance, and glass[clarification needed] and crime insurance.[2] It may include marine insurance for shipwrecks or losses at sea, fidelity and surety insurance, earthquake insurance, political risk insurance, terrorism insurance, fidelity and surety bonds.

One of the most common kinds of casualty insurance today is automobile insurance. In its most basic form, automobile insurance provides liability coverage in the event that a driver is found «at fault» in an accident. This can cover medical expenses of individuals involved in the accident as well as restitution or repair of damaged property, all of which would fall into the realm of casualty insurance coverage.[3]

If coverage were extended to cover damage to one’s own vehicle, or against theft, the policy would no longer be exclusively a casualty insurance policy.

The state of Illinois includes vehicle, liability, worker’s compensation, glass, livestock, legal expenses, and miscellaneous insurance under its class of casualty insurance.[4]

In 1956, in the preface to the fourth edition of Casualty Insurance Clarence A. Kulp wrote:

Broadly speaking, it may be defined as a list of individual insurances, usually written in a separate policy, in three broad categories: third party or liability, disability or accident and health, material damage. One of the results of comprehensive policy-writing …. is to raise the question of the usefulness of the traditional concept of casualty insurance … some insurance men predict that the casualty insurance of the future will include liability and disability lines only.

Later in Chapter 2 the book states that insurance was traditionally classified under life, fire-marine, and casualty. Since multiple-line policies began to be written (insurance contracts covering several types of risks), the last two began to merge. When the NAIC approved multiple underwriting in 1946, casualty insurance was defined as a blanket term for legal liability except marine, disability and medical care, and some damage to physical property.[5]