Careers Business Ownership What Is Commercial Casualty Insurance? Definition & Examples of Commercial Casualty Insurance Share PINTEREST Email Print Sellwell / Getty Images Business Ownership Operations & Success Business Insurance Sustainable Businesses Supply Chain Management Operations & Technology Marketing Market Research Business Law & Taxes Business Finance Accounting Industries Becoming an Owner By Marianne Bonner Marianne Bonner Marianne Bonner, a certified CPCU and ARM, worked in the insurance industry for 30 years as an analyst and underwriter among other roles and holds multiple professional designations. Marianne has written many articles for International Risk Management Institute's Risk Report. Learn about our Editorial Process Updated on 09/17/20 Commercial casualty insurance is business insurance that primarily covers damage caused by a business or its employees. Learn more about this category of insurance and why it matters for your business. What Is Commercial Casualty Insurance? Commercial casualty insurance is a broad category that's mostly comprised of liability coverages. It's the liability half of property and casualty insurance. Property insurance covers financial losses that result from damage or destruction of your business' physical assets like buildings or furniture. Casualty insurance covers damages or settlements you're obligated to pay because of an accident related to your business that injured a third party. How Commercial Casualty Insurance Works The way in which this coverage works varies depending on the type of insurance. In general, it comes into play if there's an injury to a third party related to your business. For example, say you own a restaurant and one of your employees just finished mopping. As they go to get the "wet floor" sign, a customer slips, falls, and sprains an ankle. That customer could sue your restaurant, and your general liability insurance would help handle the claim and any resulting lawsuit. If an employee burns themselves while making a latte, that would be covered by a different type of commercial casualty insurance—workers' compensation. Types of Commercial Casualty Insurance Here are the most commonly purchased types of commercial casualty insurance. General liability insurance: This is essential business insurance. It protects businesses from claims or suits by customers, clients, and other third parties for bodily injury, property damage, or personal and advertising injury. Personal and advertising injury refers to damage to a third party's reputation due to false advertising (lying about another business), libel, or slander. Errors and omissions insurance: Also called professional liability insurance, this coverage is important for any business that performs a service or provides advice in exchange for a fee. For example, medical professionals carry a specific type of errors and omissions insurance called medical malpractice insurance. Management liability insurance: This is a subcategory of errors and omissions insurance covering the risks of managing a business. It includes directors' and officers' liability, employment practices liability, and fiduciary liability coverages. Cyber liability insurance: Once purchased only by technology companies, this insurance is now necessary for most types of businesses. It covers claims related to cybersecurity breaches. Workers' compensation insurance: This coverage is mandatory for most employers in every state but Texas. It pays the benefits required by law to employees injured on the job, which typically includes medical benefits and payments for a portion of lost wages. Employers' liability insurance: Workers' compensation insurance includes provisions that limit an employees' ability to sue their employer. Some employees aren't included in workers' compensation coverage, so employers may need to purchase employers' liability insurance to cover lawsuits. Commercial auto insurance: This covers potential liability and damage related to business vehicles. Excess liability: This policy helps to cover claims that exceed your policy limits. Umbrella insurance provides similar coverage, but it may also cover claims that aren't covered by the primary policy. Foreign casualty insurance: This covers injuries that occur outside the U.S. and may Include foreign liability, foreign auto, and foreign workers' compensation coverage. Specialty coverages: This covers exposures that are unique to certain businesses. Examples include special event insurance, media liability, and entertainer liability. Some types of insurance are considered casualty coverage even though they don't cover third-party claims. An example is commercial auto physical damage insurance. This coverage is actually a type of property insurance as it protects a business against physical damage to property (vehicles) the business owns. Auto physical damage insurance is classified as a casualty coverage because it's usually provided in combination with commercial auto liability insurance. Workers' compensation insurance also falls under casualty insurance even though it isn't really liability coverage. It pays benefits to workers injured on the job on a no-fault basis, which means that regardless of who's at fault for the injury, as long as it happened on the job, it's likely that it will be covered. Injured workers also don't need to file a lawsuit against their employer to obtain workers' compensation benefits. Some types of insurance were considered casualty coverages in the past but are now classified as property coverages. These include commercial crime and equipment and machinery insurance. Key Takeaways Commercial casualty insurance is business insurance that primarily covers damage caused by a business or its employees. It's the liability half of property and casualty insurance.How commercial casualty insurance works varies depending on the type of insurance.Commonly purchased types of commercial casualty insurance include general liability, errors and omissions, and management liability insurance.