It’s a fact of life that one of the most important ongoing expenses any business will carry is insurance. While insurance can seem costly, it’s an essential part of risk management for your business. The kinds of insurance you’ll need to carry can vary from business to business, and depends largely on what you do. Freelance game designers may not need commercial auto insurance, for example, while construction workers may not need to carry insurance against libel suits.
Still, it’s important to have a solid understanding of the different kinds of commercial insurance so that you can make the best choice for you. Two of the most common forms of coverage for commercial businesses are property and casualty insurance. Let’s examine what casualty insurance is, how it works, what it covers, why it may be vital for your business and where to go for help and advice.
Property Insurance vs. Commercial Casualty Insurance
Most contracting and commercial businesses understand the importance of property insurance. Any business that suffers a risk of property damage, whether by theft, accident, misuse, criminal action, neglect or even natural disaster should carry property insurance. It covers your building, your equipment and machinery, vehicles and anything therein. It’s usually part of a standard insurance package.
Commercial casualty insurance, however, is a term that you may hear bandied around that sounds terrifying and many people don’t understand exactly what it is. That’s partially because casualty insurance sounds more ominous than it necessarily is. While it may sound like coverage when someone’s been hurt or even killed, casualty insurance actually covers a wide range of (mostly) unrelated insurance packages. Many things that aren’t included under your personal property coverage, and are related to the idea of liability, fall under casualty insurance.
What Is Commercial Casualty Insurance?
Casualty insurance is a broad category of insurance coverage that protects you against liability claims for loss of property, injury and damage to others. Liability is the key factor in casualty insurance. That means that when something occurs for which you, your business, or one of your employees might be found liable in the course of doing business, it’s the insurance that will kick in. As such, it’s a broadly applicable kind of insurance, which is why there are several different kinds of casualty insurance you might consider.
Kinds of Casualty Insurance
There are a wide range of coverage types that traditionally fall under casualty insurance, and many are types you’ve heard of or may even carry for your personal use. Automobile liability insurance, for example, is a type of casualty coverage. Every business that has employees is required by law to carry workers’ compensation insurance, another form of casualty insurance. Aviation insurance, nautical insurance, surety bonds and more also fall under this umbrella.
Cyber-fraud insurance is a fast-growing type of coverage that’s becoming more and more important with the range of data breaches in recent years. Closely related is identity theft insurance to cover you should someone use your records to steal a customer’s or employee’s identity. Employee theft coverage is something you may consider. Companies that produce products for sale should consider product liability insurance if there’s any chance that their goods can injure another person.
If you have particularly valuable equipment such as high-end production machinery or even advanced computer systems, you may wish to cover these on separate policies. Any time there’s a chance that a customer, employee or bystander could suffer an injury or loss due to your company’s operations, you should have insurance coverage.
Errors and omissions insurance covers any businesses that provide advice or services for a fee like medical professionals or accountants. Technically, even insurance carried by a writer who might face lawsuits for damaging the reputation of another person through libel suits can be considered casualty insurance.
What Does It Cover?
Again, this is a kind of liability insurance. That means that it kicks in whenever you face a lawsuit for injury or property damage caused by your company, your employees or your operations in the normal course of business. If you’re a pizza company and your driver is out delivering and causes a car accident, you can be held liable for his accident. When held liable, your casualty business auto insurance will cover the damage to the victim’s vehicle and their medical bills.
If you’re an auto repair facility and a customer gets injured coming into your shop by debris or heavy machinery, they can sue you for the damages they suffer. Your casualty insurance will cover those injuries and medical bills. Workers’ compensation coverage, of course, is a must to protect your employees if they’re injured in the course of their normal work. The aforementioned pizza driver would file for workers’ compensation if they are injured in the accident, while the auto garage worker who slips on oil and is injured in a fall would also seek workers’ comp coverage.
Negligence: The Key Factor in Liability
The key factor in all of these is the idea of negligence. In order for casualty coverage to kick in, you have to be proved negligent. This means that, as a business, you have a duty of care towards your customers, employees and guests. If you in some way violate that duty of care through reckless actions or reckless failure to act, and that violation directly or indirectly results in damage or injury, you are negligent.
For example, if you have a wet floor in a restaurant, and a customer brings it to your attention, you have a responsibility to clean it up, as well as posting clear and visible warning signs until the floor dries. If you fail to do so within a reasonable amount of time after being notified of the issue, and a customer slips and falls, getting hurt in the process, you are negligent.
Nobody thinks they’re going to be careless or negligent in their operations, but accidents do happen, and people do make reckless mistakes. You cannot guarantee that you will always be as careful as you should, and you certainly can’t make that guarantee of your employees. That’s why commercial casualty insurance is essential to your business operations.
Specific Casualty Insurance vs. Umbrella Policies
Many insurers offer combined coverage policies that include a certain level of casualty coverage. Often, these packages combine property and casualty coverage. It’s important, however, to make sure that you’re getting all of the coverage you need. An umbrella policy may seem like the solution, but umbrella policies are intended only to expand and increase existing liability coverage, not to replace it. That means that while an umbrella policy is almost always a good idea, you’ll still need specific coverage in all the areas you might see liability.
Building a Liability Policy
Usually, your casualty insurance will begin with a Commercial General Liability, or CGL, policy. This kind of insurance is issued to protect you against claims of bodily injury or property damage that arise from your operations, products and premises. From there, you may expand coverage depending on the kind of business you run.
In the end, you’ll want to work with an insurance provider you can trust. At Harris Insurance, we have years of experience serving residential and commercial customers across the state of Florida. We’ll never try to force coverage on you that you don’t need, and we’ll work to build the ideal policy for your company with sincerity and direct dealing every step of the way. If you’re interested in working with us, read more about our commitment to service, and then get in touch with us for a quote today.