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Property and casualty insurance

Property and casualty (P&C) insurance refers to several types of insurance policies that cover business risks. You’ll likely need some of these policies for the financial protection they offer, and to meet contractual or legal obligations.

What is property and casualty (P&C) insurance?

Property and casualty insurance, also known as P&C insurance, refers to several business insurance policies that cover common business risks.

This includes damage and theft of your business property. It also includes business liabilities, such as the risk of getting sued if your business is accused of causing physical or financial harm.

Business property insurance covers damage to the things your business owns or rents, such as your business location, your business equipment, inventories, and vehicles. It insures against risks such as like fire, theft, and vandalism. In some cases, it may also cover equipment breakdowns.

Casualty coverage insures your business against liability claims of physical or financial harm that often involves a lawsuit. This liability protection includes things like a customer’s slip and fall accident at your business that causes a bodily injury, or a client suing you for a financial loss if you made a mistake or failed to deliver on a contract.

What does property and casualty insurance cover for small businesses?

Property and casualty insurance protects your business from common business hazards and financial risks. This includes:

Third-party bodily injury

If a customer has a slip and fall accident on your property, it could result in an expensive lawsuit and medical bills.

Third-party property damage

This involves you or an employee causing damage to someone else’s property, such as a customer's laptop. Third-party property coverage would insure against the cost of repairs, lawsuits, and settlements.

Product liability

Product liability coverage insures your business against claims that a product you made, sold, or distributed caused a physical injury or property damage.

Advertising injuries

Advertising injuries include libel or slander against an individual or business in an advertisement, social media post, blog, etc. This coverage also includes accusations of copyright infringement.

Business property damage

If your own business property is damaged in a fire or stolen, business personal property (BPP) coverage can help you repair or replace things like furniture, computers, and inventories that are kept on-site.

Automobile accidents

If one of your business vehicles is in an accident, commercial auto insurance would cover your legal bills, medical expenses, and property damage. This coverage is required in most states for businesses that own vehicles. Your personal car insurance, for a vehicle you privately own, won’t cover the vehicles owned by your business.

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What are the different types of commercial property and casualty insurance?

These types of policies should be an important part of your risk management plan, as their covered perils include common business risks and they can insulate your business from financial losses.

Some types of coverage may be required to qualify for a business contract, to maintain a professional license, or to comply with the laws in your state.

Here are the most common types of commercial property and casualty policies:

Commercial property insurance

Commercial property insurance is like homeowners insurance for your business. It covers the replacement cost of your business property in case it’s stolen, lost, or damaged (from things like fire or vandalism). It insures your business’s physical location and other assets, such as equipment and inventories.

Commercial landlords might refer to this as landlord insurance, or commercial renters insurance, as they often require it to sign a lease.

Your commercial property insurance might cover natural disasters, although it would probably exclude wind and hail damage if you live in a hurricane-prone area. You might be able to add wind and hail coverage to your property insurance, although it would likely have a higher deductible than the rest of your property coverage.

Commercial property insurance does not include damage from floods, so if you need this coverage you would have to buy flood insurance as a separate policy.

If you operate a business out of your home, you might want to check the exclusions on your homeowner’s insurance policy. It might have coverage limits for business property that are lower than those for your personal property. It might even exclude your business property altogether. You may need to add a homeowner’s policy endorsement to your existing policy, to add or increase coverage.

General liability insurance

General liability insurance covers the most common business risks, such as a customer injury at your business, damage to a customer’s property, and advertising injuries. Most general liability policies include product liability insurance, which covers your legal defense if someone claims a product you made, sold, or distributed caused a bodily injury or property damage.

Business owner’s policy

A business owner’s policy (BOP) combines your general liability coverage and your commercial property coverage into one policy. A BOP is usually less expensive than buying each policy separately.

Inland marine insurance

Inland marine insurance covers your business property, such as tools, inventories, and equipment, while it’s in transit over land or stored at an off-site location.

Workers’ compensation insurance

Workers’ comp is also required in most states for any business with one or more employees, and for sole proprietors in riskier industries such as construction. It covers the medical bills and lost wages of your employees in case of a work-related accident or illness.

Professional liability insurance

Professional liability insurance, also known as errors and omissions insurance (E&O), covers the cost of lawsuits if a client sues you over unsatisfactory work, such as missing a deadline or making a mistake that costs the client money. States laws often require this coverage for the licensing of healthcare professionals, insurance professionals, real estate professionals, and lawyers.

Cyber insurance

Cyber insurance, also known as cyber liability insurance, insures against the high costs of dealing with a data breach or malicious hacking of your computers. It covers expenses such as customer notifications, credit monitoring, legal fees, and fines.

Employment practices liability

Employment practices liability insurance (EPLI) covers employee lawsuits over a claim of wrongful termination and other violations of an employee’s rights. This coverage can often be added as an endorsement to a general liability policy or a business owner’s policy.

Find quotes for property and casualty insurance with Insureon

Complete Insureon’s easy online application today to compare insurance quotes from top-rated U.S. insurance companies. You can also consult with an insurance agent on your business insurance needs. Once you find the right insurance coverage for your small business, you can begin coverage in less than 24 hours.

Updated: April 1, 2024
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