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Casualty Insurance Part 1 of 2

The lines of coverage addressed by casualty insurance are:

Automotive liability
general liability
products liability
umbrella liability
excess liability
workers’ compensation
professional liability (medical malpractice)
environmental products liability

Casualty Insurance is often equated to liability insurance of an individual or organisation for negligent acts or omissions.

The term has also been used for property insurance as well as aviation insurance.  Boiler,  machinery,  insurance, glass and crime insurance falls under this category.  It can include marine insurance for shipwrecks or losses at sea.  Also included may be earthquake, political risk insurance, terrorism insurance, fidelity and surety bonds.

One of the most common kinds of casualty insurance today is automobile insurance. In its most basic form, automobile insurance provides liability coverage in the event that a driver is found “at fault” in an accident. This can cover medical expenses of individuals involved in the accident.  Furthermore it can be for  restitution or repair of damaged property.

GENERAL LIABILITY (Under Casualty Insurance)

The number of lawsuits being filed against businesses is both surprising and alarming. General liability is the first line of defense. A business can be sued for almost any reason. Negligence, personal injury, libel, slander, errors, omissions, faulty products, advertising misprints and more.

It can cover things like bodily injury, property damage, contractual liability, damages to property you rent or occupy.  Data Breach is offered as an optional coverage that can help you comply with regulatory requirements.  It can provide guidance on how to prevent and handle a breach.  This can also cover response and liability expenses to quickly restore confidence in your practice or business.

PRODUCT LIABILITY (Under Casualty Insurance)

This is the area of law in which manufacturers, distributors, suppliers, retailers and others who make products available to the public are held responsible for the injuries those products cause.

In the United States, the claims most commonly associated with product liability are negligence, strict liability, breach of warranty and various consumer protection claims. The majority of product liability laws are determined at the state level and vary widely from state to state. Each type of product liability claim requires different elements to be proven to present a successful claim.

There are three major types of product liability claims:
Manufacturing defect
Design defect
A failure to warn (also known as marketing defects)

However, in most states these are not legal claims in and of themselves, but are pleaded in terms of the theories mentioned above. For example, a plaintiff might plead negligent failure to warn or strict liability for defective design.
Manufacturing defects are also those that occur in the manufacturing process and usually involve poor quality materials or shoddy workmanship.

Design defects occur where the product design is inherently dangerous or useless no matter how carefully manufactured.

Failure- to- warn defects arise in products that carry inherent non-obvious dangers which could be mitigated through adequate warnings to the user, and these dangers are present regardless of how well the product is manufactured and designed for its intended purpose.

However, in most states these are not legal claims in and of themselves, but are pleaded in terms of the theories mentioned above. For example, a plaintiff might plead negligent failure to warn of liability for defective design. Manufacturing defect are those that occur in the manufacturing process and usually involve poor quality materials or shoddy workmanship. Design defects occur where the product design is inherently dangerous or useless no matter how carefully manufactured.

A basic negligence claim consists of:-

a duty owed
a breach of that duty
the breach was the cause in fact of the plaintiff’s injury (actual cause)
the breach proximately caused the plaintiff’s injury
and the plaintiff suffered actual quantifiable injury (damages)

Rather than focus on the behaviour of the manufacturer (as in negligence), strict liability claims focus on the product itself. Under strict liability, the manufacturer is liable if the product is defective, even if the manufacturer was not negligent in making that product defective.

UMBRELLA INSURANCE (Under Casualty Insurance)

Umbrella insurance refers to liability insurance that is in excess of specified other policies and also potentially primary insurance for losses not covered by the other policies.

Excess insurance is similar in that it pays after an underlying primary policy is exhausted. Umbrella policies tend to provide broader coverage over one or more primary policies. An umbrella policy may cover certain risks from the first dollar of loss or liability incurred, which were never covered under the primary policies. As your wealth increases, so does your attractiveness as a target for lawsuits.  Examples of liability that an umbrella policy may cover that a homeowner’s policy often excludes include:
False arrest
Libel
Slander
Invasion of privacy

Liability settlements and verdicts can exceed $10 million, $20 million and higher. While trusts and other techniques can shield some assets from the court’s reach, prudence suggests choosing coverage at least equal to your current net worth and present value of your employment income stream.

It is also worth considering the moral obligation to be able to fully compensate someone who has perhaps suffered a lifelong debilitating injury for which you are responsible e. g. in a car accident where the driver was at fault.
Umbrella coverage typically costs a few hundred dollars in premium per million dollars of coverage and furthermore the cost per million decreases as the amount of coverage increases.