Many people use the terms “casualty” and “liability” as if they were synonymous. However, casualty insurance includes insurance that does not fall within the definition of liability insurance. “Casualty insurance” is defined as an “agreement to indemnify against loss resulting from a broad group of causes such as legal liability, theft, accident, property damage, and workers’ compensation.” Black’s Law Dictionary 871 (9th ed. 2009).
Liability insurance is part of the casualty line of insurance. A “casualty” is an accidental injury, a fortuitous event.
For every such harm there is a law or legal principle that places the burden of the consequences back on the finances of the initiator of the harm. Applying the ancient maxim of the law that “for every wrong there is a remedy…” liability insurance exists to fund the remedy.
Another feature of casualty insurance policies is that they are limited to injuries to persons other than the insured. The ultimate concern of these policies is the insured—the person who buys the insurance who needs to be protected from claims made by third persons.
At one time, insurers were limited by statute and their charters were limited as to the type of insurance they could write. Casualty insurance could only be written by casualty insurance companies. That is no longer the case and casualty insurance may be written by any insurer willing to do so with sufficient assets to perform.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts