As Ben Franklin famously said, “By failing to prepare, you’re preparing to fail.” An important part of planning for your company’s success is knowing what to do if things go wrong. Getting commercial property and casualty insurance should be an important part of your risk management plan. Commercial property and casualty insurance, also called commercial P&C insurance, combines two types of insurance to cover you for some of the most common types of risks your business faces. Below, we’ll help you understand what this coverage entails and why you shouldn’t go into business without it.

Understanding commercial property and casualty insurance

Commercial property and casualty insurance is a category of business insurance that protects businesses — including small businesses — from the financial consequences of accidents that could threaten not only the success of the business but, in some cases, its very existence.

The two types of insurance — property and casualty — can tackle several business risks and are often sold together as package policies such as a business owners policy (BOP), which we’ll discuss in more detail below. As part of a sound business plan, it’s important to be savvy about the role of both commercial property insurance and commercial casualty insurance and to understand how each can help you mitigate risks.

What’s the difference between property and casualty insurance?

In general, property insurance safeguards your business’s physical assets (also known as first-party assets). The coverage includes protection for the financial impact of incidents like fire, theft, or vandalism to property your business owns. Casualty insurance, on the other hand, covers your business for third-party liabilities. An example of a third-party liability that falls under the “casualty” category would be if a customer trips and falls over equipment that you or your employee mistakenly left out. The customer’s medical costs from their bodily injury could be covered under this category.

Let’s learn a little more about the difference between property and casualty insurance.

Commercial property insurance

Commercial property insurance covers losses from damage to or destruction of a building and/or its contents, or the consequences arising from such damage due to covered perils. This is considered first-party property insurance and includes damage to your owned building, equipment, business property, inventory (and sometimes others’ property).

Whether or not a building is owned is an important point because if you are leasing the space where your business operates, commercial property insurance that covers the physical building is not appropriate.

Business contents insurance, which covers theft or damage of business property inside or within 100 feet of the building, is the insurance that small business owners most commonly need, and is included in Thimble’s BOP. Furthermore, you may need business equipment protection to cover your business’s assets and owned equipment.

Thimble’s commercial property insurance (which is available as part of its BOP coverage) combines coverage for your owned physical building and the business contents inside the building. It also includes business interruption insurance, which covers lost income if a covered event interrupts your normal business operation.

Commercial casualty insurance

Casualty insurance, or liability insurance, shields you and your company from financial consequences arising from legal claims due to accidents that occur on your property or because of your business operations, even if they are not valid claims. The most common types of commercial liability insurance include:

Some of these types of insurance cover third-party bodily injury and property damage losses.

General liability insurance, for example, may apply if a client, while attending a meeting at your office, slips on a wet floor and injures himself. In this instance, you could be liable for his bodily injury. General liability insurance provides the investigation and defense of the claim as well as negotiates settlements, such as the costs of medical expenses. This applies whether the settlements are negotiated among the parties outside of a courtroom or determined through litigation.

An example of third-party property damage that would fall under the “casualty” category would be if, while performing services at a client’s home, you knock over an expensive lamp. In such a scenario, it is likely that you would be responsible for replacing or repairing the damaged lamp. Even worse, if the lamp is one of a pair that is no longer in production, you could end up buying two!

Other examples of losses that casualty insurance may cover include:

  • Workers’ compensation — Most states require you to have workers’ compensation to cover the costs of any work-related injuries or illnesses that your employees sustain.
  • Professional liability insurance — Also called errors and omissions insurance, professional liability insurance provides the investigation and defense of claims and may pay damages when a client claims your advice led to their financial loss.
  • Cyber liability insurance — Can cover costs related to your liability arising out of a data breach on your computer systems that leads to the release of your customers’ personally identifiable information.
  • Employment Practices Liability Insurance (EPLI) – Protects employers from employment-related claims that aren’t covered by workers’ compensation, such as sexual harassment, wrongful termination or discrimination.1

Who needs commercial property and casualty insurance?

There are some types of insurance that you’re legally required to carry, such as workers’ compensation, if your business meets certain criteria. However, to function as a successful business, you must still have insurance, even if it is not legally required.

For example, if you borrow money to purchase commercial property, your lender may require you to purchase commercial property insurance. If you lease your business space, your landlord may require renters insurance. Your customers may also require that you have insurance as a prerequisite for doing business.

But beyond whether or not it is required, businesses that want to protect themselves from the prospect of financial disaster — or even ruin — need to closely consider what types of commercial property and casualty insurance they need.

Let’s face it, an accident can happen at any time, no matter how careful we are. Commercial insurance is one of the best ways to protect your business from the financial consequences of an accident so that a covered event doesn’t end up paralyzing your company.

How do you get commercial P&C insurance?

You can obtain each of the types of commercial insurance coverages described above as standalone policies. As an added convenience, though, some insurance companies offer bundled insurance coverages. A BOP is an example of bundled coverage.

The most common BOPs can protect small business owners against the financial impact of:

  • Property damage
  • Liability
  • Business interruption costs

A key aspect of a BOP is business interruption insurance, covering income loss due to a property loss or damage that interferes with a company’s normal operations. This is important because costs resulting from business interruption can sometimes be greater than the original property damage.

Keep in mind, however, that a BOP usually will not include professional liability, commercial auto insurance, workers’ compensation, or health and disability insurance. For these coverages, businesses will need to obtain separate insurance policies.

Protect your business with commercial P&C insurance

At Thimble, we like to keep things simple. Thimble’s business owners policy combines commercial property insurance and general liability insurance to offer your company a broader level of protection. Plus, if a claim is made against your business, valid or not, BOP will provide the investigation as well as your legal defense.

And with Thimble, insurance coverage doesn’t need to be a one-size-fits-all approach. You can choose from a policy by the job, month, or year to make sure you can tailor your insurance needs to your business, instead of the other way around. Click Get a quote or download our mobile app, answer a quick set of questions, and receive your quote. It only takes a few minutes. How’s that for simple?


  1. Investopedia. Employers’ Liability Insurance.