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What is Property and Casualty Insurance?

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What is Property and Casualty Insurance?

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As your income increases over time, you tend to accumulate more valuables. These include but aren’t limited to a home, belongings, and vehicles. It is within this backdrop that property and casualty insurance gain value. These forms of insurance are particularly useful to business owners as well. Continue reading to understand what this umbrella term refers to, its value and the varied forms within which it exists.

What is Property Insurance?

This form of insurance provides protection to your personal property. The scenarios that are covered under this insurance depend upon the kind of policy you have.

Understanding the Value of Purchasing Property Insurance 

Entrepreneurs, as well as small or medium enterprises, stand to benefit from this form of insurance. It can offer coverage under the Workmen’s Compensation Act. This includes health and accident insurance in addition to fidelity guarantee, public liability, and transit insurance, to name a few. 

Additionally, you can also choose a different sum assured under different sections of the policy. Certain packages like a comprehensive package policy offer employer benefits as well like group health insurance.

Unpacking Varied Forms of Property Insurance 

Package Insurance Policy – Here, a combination of covers are offered under a single plan. If you are insured, you are entitled to coverage for assets, including buildings and their contents. Certain personal liabilities are included under this policy. 

Fire Policy Insurance Policy – This policy covers any damage, loss or unforeseen destruction that occurs on a property owing to a fire or other related perils. These include but aren’t limited to malicious damage, impact damage and damage stemming from a storm, typhoon, hurricane, or flood. 

Burglary Insurance Policy – Applicable for a house or for a business, this policy provides coverage for damage or loss to a property as well as the goods within it if they are covered. It can be further extended to malicious damage, theft etc.

All Risks Insurance Policy – This policy is geared to cover the loss of items like laptops, jewellery, mobiles as well as other assets that are portable. Policy benefits can vary among insurers and have restrictions tethered to them. Unlike its name, it does not cover everything under the sun and has a pre-defined set of assets.

Marine Cargo Insurance Policy – Coverage is provided for material damages during transits and applies to rail, air, water, registered post parcel and courier.

Determining the Sum Insured Applicable

The sum insured under property insurance is ordinarily determined using the following methods.

Market Value – This method results in the insured individual only being paid a certain amount which may fall below the replacement costs of damaged property. Price depreciation owing to loss is relevant here. 

Reinstatement Value – Since there is no depreciation in the value of the property, the insurer recompenses you the replacement cost right up to the sum insured. That said, the damaged assets must be replaced or repaired in order for the claim amount to be handed over. This is applicable to fixed assets alone.

What is Casualty Insurance?

This form of insurance provides liability coverage in the event that you accidentality damage someone’s property or hurt them. As there exist plenty of strict regulations in place, all businesses must insure themselves. 

Assessing the Different Types of Casualty Insurance 

Commercial General Liability – This policy provides compensation to businesses in the event they face legal liabilities relating to third-party damage or injury during business operations.

Public Liability Insurance – Here, coverage extends towards legal costs stemming from property damage or bodily injuries sustained within the insured operations or premises. Industrial risks that are possible under manufacturing units and non-industrial risks for IT companies, clubs, hotels, schools, restaurants and BPOs are covered.

Workmen’s Compensation Insurance – Statutory liabilities of any employer towards employees in case of injuries, death, or partial disabilities during employment are covered here. Legal expenses are included, and coverage can extend towards medical expenditure as well.

Pollution Legal Liability – Companies that conduct operations relating to construction, energy, chemicals, and petrochemicals are encouraged to avail of this form of insurance. Comprehensive coverage is provided against exposure and risk. 

Contaminated Product Insurance – Adverse publicity, malicious product tampering and accidental contamination are provided coverage against under this form of insurance. 

Final Thoughts – Factors to Bear in Mind

Although availing of property and casualty insurance is highly recommended if you’re a business owner, you must keep the following factors in mind when purchasing a policy.

  • Only purchase a property and casualty insurance policy from a company that’s registered with the Insurance Regulatory and Development Authority of India (or IRDAI).
  • Compare different property and casualty insurance policies online prior to selecting a policy.
  • Policy wordings must be carefully considered, as should inclusions and limitations.
  • Should you purchase a policy via an agent, be sure to check out his/ her identity card and license.

Fi recognizes the responsibilities tethered to running a business and encourages smart financial management of your money. If you’re purchasing a property or a home, then you can check out the Fi EMI calculator to help you understand how much expenses you will incur to help you better manage your financial plan.

Frequently Asked Questions

1)What is the purpose of all property and casualty insurance? 

Property and casualty insurance serves to provide coverage for assets in addition to liability insurance for damage, injuries and accidents to others and their belongings.

2)What are examples of casualty insurance?

Examples of casualty insurance include credit, workers’ compensations, aviation, liability and theft. 

3)What could be an example of property and casualty insurance?

Homeowners insurance serves as a key example of both, property and casualty insurance as liability coverage is provided as is property protection coverage.

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