What You Need to Know About Casualty Insurance

By Mick Travis , last updated December 11, 2011

Casualty insurance is a term used to describe a wide range of insurance types, all of which either deal with damages or loss relating to property or to employee liabilities, such as workers compensation or medical liability. In a very broad sense, the term casualty insurance alludes to insurance policies which protect the holder of the policy from loss caused by accidents or negligence to physical property and/or to any persons involved. Though often used by businesses, casualty insurance is sometimes purchased by homeowners to protect themselves in the event that a guest in their home is injured during an accident or natural disaster.

Further confusion regarding the definition of casualty insurance comes into play when taking into consideration that casualty insurance has an indirect relationship with the four main types of insurance (car, life, health and homeowners), but is not directly connected to any of them. The indirect connections between casualty insurance and these main types of insurance exist due to the fact that most accidents occur in a home, a car, or a place of employment. To further define and narrow down a term as ambiguous as casualty insurance, insurers further delineate the concept by breaking it down into two categories which are based on the location of the accident covered by the policy: personal casualty insurance (e.g. car insurance, inland marine insurance, homeowners insurance, boat insurance, personal liability insurance), and property casualty insurance (e.g. car insurance, inland marine insurance, farm insurance, crime insurance, e-commerce insurance, heavy equipment and machinery insurance, workers compensation insurance, etc.).

Despite the attempt to clarify the boundaries of these two main types of casualty insurance, there is still some overlap between the two, as evidenced by the inclusion of car insurance and inland marine insurance in both groups. This can be explained by pointing out that car insurance which falls under personal casualty insurance covers one's personal vehicle in the event of an accident, while car insurance which falls under property casualty insurance covers business vehicles, such as delivery trucks and moving vans. Likewise, inland marine insurance which falls under personal casualty insurance only covers personal property, while inland marine insurance falling under property casualty insurance covers damage or loss to company property.

One of the lesser known forms of casualty insurance is fidelity insurance. Fidelity casualty insurance is particularly popular with businesses, as it protects the policy holder from a wide-ranging variety of fraud and theft. Holders of fidelity casualty insurance policies receive financial reimbursement for damages or loss resulting from theft or fraud, in the event that their claim is accepted. Even less frequently, casualty insurance may include such things as livestock insurance, surety insurance, earthquake insurance, identity theft insurance, cyber fraud insurance and terrorism insurance. Over the last decade, the number of businesses taking out identity theft and cyber fraud casualty insurance policies has risen consistently. Those interested in taking out some form of casualty insurance should bear in mind that the breadth of insurance types that are considered to be part of casualty insurance depends upon the state in which one resides.

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