If you own a business, you should be familiar with certain insurance terms that apply to you. Commercial insurance is a blanket term that applies to commercial general liability, business owners' policies, commercial automobile and even workers' compensation insurances. Property and casualty, or P&C, insurance refers to any type of insurance that protects against physical loss of an object or legal costs relating to liability. Commercial insurance is a type of P&C insurance.
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Property and Casualty Insurance Types
Many types of insurance qualify as P&C policies. Some of the most common types include auto, homeowners', umbrella, workers' compensation and general liability policies. Life and health insurances do not qualify as P&C policies in most states, even when they are written for business purposes or on company executives. All commercial insurance is P&C, but P&C insurance encompasses more than just commercial policies.
Commercial General Liability
Commercial general liability is one of the most common forms of commercial insurance on the market because it applies to every type of business. These policies pay for a broad range of things for which businesses might be held legally liable. They generally include, among other things: products and completed operations coverage, which pays for injuries or damages
as a result of work a business performs or a product it manufactures; hired or non-owned auto coverage, which extends liability to automobiles that the business does not own but might use during its operations, such as rented vehicles or those that belong to its employees, and personal injury protection, which pays on intangible damages such as slander and libel.
Business Owner's Policy
Some insurers write business owners' policies, or BOPs. BOPs combine a general liability policy with property coverage and sometimes other types of insurance as the business needs dictate. Commonly, a BOP contains coverage for any building a business owns as well as its inventory, furniture, machinery and other property. Some BOPs contain commercial auto coverage, so the business's vehicles are protected on the same policy as the rest of the property.
Commercial general liability policies do not protect against injuries that employees suffer while working. All work-related illnesses and injuries must be covered by a workers' compensation policy provided by the employer. These policies are mandatory in nearly every state. Workers' compensation policies provide immediate medical benefits without stated limit for employees and protect the employers from lawsuits relating to workplace injuries. Like other commercial policies, these are P&C insurance policies.