When entrepreneurs write their business plans, they often include detailed points to make the business stand out and predict its success. However, many neglect considering how they will protect their nascent company from disasters or lawsuits stemming from mistakes that lead to customers’ financial losses. 

That’s where commercial property and casualty insurance (also called commercial P&C insurance) comes in. Property and casualty insurance is a category of business insurance that includes policies written to protect businesses—including small businesses—from many accidents, threats, and losses to their property and work environments.

The two types of insurance can tackle several business risks and are often sold together as package policies such as a business owner’s policy (BOP). To help your business succeed, it’s important to be savvy about the role of both commercial property insurance and commercial casualty insurance. Let’s dive in!

What is included in commercial property and casualty insurance? 

Property insurance safeguards your business’s physical assets. The coverage includes protection against many causes of loss or risks, including fire, theft, wind water, vandalism, and other physical losses. On the other hand, casualty (or liability) insurance shields you and your company from costs arising from legal claims due to accidents you may cause that harm others, which occur on your property or due to your business operations. Let’s learn more about the first player in P&C insurance. 

Commercial property insurance 

This type of insurance covers losses from damage to or destruction of a building, 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, other business property, inventory, and sometimes others’ property. Commercial property insurance protects the building structure as well as your business property inside and around the building, usually within 100 feet of the building—it depends on the terms of your policy.

Depending on the option you choose, in the event of a loss, the policy provides that you will receive the value of the lost or damaged property minus depreciation or the replacement cost of the property (if the property cannot be repaired). Of course, the replacement cost option may be more expensive. Furthermore, commercial property insurance can also

  • Protect business income due to a loss
  • Protect business income if you can’t open, or 

  • Provide extra expense coverage to cover the cost of renting a property where you can operate during repairs 

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:

  • General liability coverage
  • Professional liability coverage
  • Auto liability coverage
  • Workers compensation and employers liability coverage
  • Excess and umbrella liability coverage
  • Directors and officers liability coverage
  • Employment practices liability coverage. 

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

An example of a bodily injury loss is if a client injures themselves while visiting your business, such as tripping and falling on a wet floor. In this instance, you could be liable for their medical expenses as well as pain and suffering. Casualty insurance provides the investigation and defense of the claim as well as any settlements, such as for medical expenses or pain and suffering. This applies whether the settlements are negotiated among the parties outside of a courtroom or determined by litigation.

An example of property damage might occur when you visit your client’s home to perform your services. Should you knock over an expensive lamp when bringing in your equipment, you could be responsible for replacing or repairing the damaged property. Even worse, if the property is one of a pair that is no longer in production, you could end up buying two!

Other examples of losses that casualty coverage may pay 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.
  • General liability insurance – Also called commercial general liability (CGL), this coverage provides the investigation, legal defense, and settlements for third-party claims related to property damage, personal and advertising injury, and non-employee bodily injury.
  • Errors and omissions insurance – Also called professional liability insurance, this coverage provides investigation and defense for claims and pays damages where 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 clients’ 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?

Small businesses that own or occupy a business premises that houses business property and interact with the public, sells its goods or services, or advertises its business needs commercial property and casualty insurance. 

Commercial property insurance is usually not required by law, but it’s crucial for businesses because it offers protection from losses due to direct physical loss or damage.2 It can protect both your physical assets and the building itself, and assists in getting you up and running again after these unforeseen types of losses. You never know when the next superstorm might hit!

If you need commercial P&C insurance, keep in mind that premiums vary depending on whether the policy reimburses you for the total cost of replacing lost items or gives you the cash value of items at the time of loss or accident. Coverage that offers replacement cost may charge higher premiums, but may expedite a quicker return to normal operations.

How do you get commercial P&C insurance? 

You can obtain each of the types of commercial insurance coverages described above as standalone policies. Many of them can be bundled into packages, such as the Business Owners’ Policy (BOP), which combines commercial property insurance and general liability insurance. A BOP is generally a good fit for smaller and mid-sized companies. 

Like a homeowner’s insurance policy, a BOP is a multi-layer of different coverages that protect a business from several liability angles. Typically, insurance carriers bundle basic insurance coverages into a BOP. 

BOP comes in two main flavors, standard and special, depending on how much coverage you need.3 A key option is business interruption insurance, covering income loss due to a property loss that stops a company’s operations. This is important because costs resulting from business interruption can be greater than the original property damage.

The most common BOP can protect small business owners against three main circumstances:

  • Property damage
  • Liability
  • Business interruption costs

However, a BOP usually will not include professional liability, auto insurance, workers’ compensation, or health and disability insurance. For that coverage, businesses have to obtain separate insurance policies for professional services, vehicles, and employees’ health and disability needs.

Take control of your circumstances with P&C insurance 

When it comes to your small business, you need to plan to protect your business as meticulously as you built it. You should shield your company from the liability it faces daily, such as a client falling and hurting themselves at your place of business. 

Remember that: 

  • Commercial property coverage protects your company’s assets from many common types of loss ( i.e., fire, theft, accidents, and other disasters). 
  • Casualty insurance includes general liability insurance, professional liability insurance, and workers’ compensation. 
  • Insurance companies often bundle some property and casualty coverages together as most businesses require both for a proper protection level. 

But where do you go for that type of protection?

Meet Thimble, the faster, more intelligent, more affordable way for small businesses to purchase general liability insurance and professional liability insurance. We provide easy-to-buy policies by the hour, day, or month. It’s insurance for companies on the go and who never know when their next job might be.

Download the Thimble mobile app and click “Get a quote,” answer three quick questions, and get covered. Don’t be a victim of circumstance. In less than 60 seconds, you can go from being exposed to liability to protected on the job.


  1. Investopedia. Employers’ Liability Insurance.
  2. NY State DFS.
  3. Insurance Information Institute, “Type of Policies.” 

Written on May 24, 2021 | Modified on: August 23, 2021

Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.