Casualty insurance is a problematically defined term loosely used to describe an area of
insuranceInsurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known...
not particularly or directly concerned with life insurance, health insurance, or property insurance. It is sometimes equated to
liability insuranceLiability insurance is a part of the general insurance system of risk financing. Originally, individuals or companies that faced a common peril, formed a group and created a self-help fund out of which to pay compensation should any member incur loss. The modern system relies on dedicated carriers...
, and is mainly used to describe the
liabilityLegal liability is the legal bound obligation to pay debts.* In law a person is said to be legal liable when they are financially and legally responsible for something. Legal liability concerns both civil law and criminal law. See Strict liability. Under English law, with the passing of the Theft...
coverage of an individual or organization's for negligent acts or omissions. However, the "elastic" term has also been used to describe
property insuranceProperty insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main ways -...
for aviation insurance, boiler and machinery insurance, and glass and crime insurance.
Casualty insurance is a problematically defined term loosely used to describe an area of
insuranceInsurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known...
not particularly or directly concerned with life insurance, health insurance, or property insurance. It is sometimes equated to
liability insuranceLiability insurance is a part of the general insurance system of risk financing. Originally, individuals or companies that faced a common peril, formed a group and created a self-help fund out of which to pay compensation should any member incur loss. The modern system relies on dedicated carriers...
, and is mainly used to describe the
liabilityLegal liability is the legal bound obligation to pay debts.* In law a person is said to be legal liable when they are financially and legally responsible for something. Legal liability concerns both civil law and criminal law. See Strict liability. Under English law, with the passing of the Theft...
coverage of an individual or organization's for negligent acts or omissions. However, the "elastic" term has also been used to describe
property insuranceProperty insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main ways -...
for aviation insurance, boiler and machinery insurance, and glass and crime insurance. It may include
marine insuranceMarine Insurance covers the loss or damage of ships, cargo, terminals, and any transport or property by which cargo is transferred, acquired, or held between the points of origin and final destination....
for shipwrecks or losses at sea or fidelity and surety insurance. It may also include
earthquakeAn earthquake is the result of a sudden release of energy in the Earth's crust that creates seismic waves. Earthquakes are recorded with a seismometer, also known as a seismograph...
,
political risk insurancePolitical risk insurance is a type of insurance that can be taken out by businesses, of any size, against political risk—the risk that revolution or other political conditions will result in a loss....
,
terrorism insuranceTerrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities....
,
fidelityA fidelity bond is a form of protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees....
and
surety bondA surety bond is issued by an entity on behalf of a second party, guaranteeing that the second party will fulfill an obligation or series of obligations to a third party...
s.
The state of
IllinoisIllinois , the 21st state admitted to the United States of America, is the most populous and demographically diverse Midwestern state and the fifth most populous state in the nation...
includes vehicle, liability, worker's compensation, glass, livestock, legal expenses, and miscellaneous insurance under its class of casualty insurance.
In 1956, in the preface to the fourth edition of
Casualty Insurance Clarence A. Kulp wrote:
It has never been possible really to define casualty insurance. Broadly speaking, it may be defined as a list of individual insurances, usually written in a separate policy, in three broad categories: third party or liability, disability or accident and health, material damage. One of the results of comprehensive policy-writing .... is to raise the question of the usefulness of the traditional concept of casualty insurance ... some insurance men predict that the casualty insurance of the future will include liability and disability lines only.
Later in Chapter 2 the book states that insurance was traditionally classified under life, fire-marine, and casualty. Since multiple-line policies began to be written (
insurance contractIn insurance, the insurance policy is a contract between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for payment, known as the premium, the insurer pays for damages to the insured which are caused by...
s covering several types of risks), the last two began to merge. Fire-marine and casualty were "portmanteau" terms. When the
NAICThe National Association of Insurance Commissioners is an Internal Revenue Code Section 501 non-profit organization which seeks to organize the regulatory and supervisory efforts of the various state insurance commissioners from around the United States...
approved multiple underwriting in 1946, casualty insurance was defined as a blanket term for legal liability except marine, disability and medical care, and some damage to physical property.