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What is casualty insurance?

Casualty insurance refers to insurance that covers the legal responsibility of individuals and businesses for losses stemming from damage to another's property or an injury to another person. This protection addresses the financial liability that a business or an individual may be legally required to satisfy. Casualty insurance comprises various policy types, including auto insurance, homeowners/condo/renters insurance, burglary and theft insurance, workers’ compensation, commercial general liability insurance, public liability, pollution liability, and contaminated product insurance.

Legal liability, and therefore the application of coverage, exists when negligence has been demonstrated by the policyholder. These third-party losses are covered under a liability plan, whether the loss involves personal injury or damage to property.


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When do I need to be aware of casualty insurance?

An auto accident is a prime example of how casualty insurance works. An individual backing out of their driveway and hitting a parked car is liable for any vehicle damage done to the other car. Liability insurance covers the cost of repairs rather than the offending party covering the costs as an out-of-pocket expense. Anyone operating a business, owning property, or driving a vehicle needs to consider purchasing an applicable policy.

What is important to know about casualty insurance?

There are different types of casualty insurance, each dealing with the specific risks of a particular environment. Both individual and business exposures vary, leading to coverage terms and applicability that differ. There are some other important items you should know about casualty insurance:

  • Business owners commonly carry workers’ compensation insurance, which protects against the liabilities an employee injured while on the job.
  • Casualty insurance is commonly bundled with property insurance for individuals, such as car insurance or homeowners policies.
  • Liability is assumed based on the negligence that was evident, and the policy only pays for the damages that occurred unintentionally.
  • Casualty insurance is limited in scope to injury or damage to third-parties and offers no financial assistance for any personal loss associated with the incident.