Property and Liability Insurance provides property damage coverage against fire and related perils either on land or as well as marine exposure to ships and cargo. The policy will cover items such as residential and commercial structures and or plus the contents, vehicles, watercrafts and almost any other property to preserve the insurable interest of the owner. The concept of risk management as part of insurance promotes innovation to underwrite almost all imaginable risk exposure against any property as long as the applicant has an insurable interest. The property insurance is divided into sub categories which include fire insurance, marine insurance and casualty insurance.
Fire insurance was the original name of property insurance. General the fire term is used in the insurance business and does not necessary mean the coverage is restricted to the fire; the application of the term indicates inclusion of wider range of coverage. Almost all property insurance will cover fire as well as any other mentioned type on loss on policy. When the term fire insurance or fire and allied lines is used in reference to the property insurance, the intention is usually to indicate the coverage is sold in conjunction with fire insurance.
Marine Insurance or Transportation insurance will cover property against perils exposure while in transportation. Marine coverage is divided into two types, ocean marine and inland marine. Ocean marine is used to cover oceangoing vessels, the cargo and ship owner’s liability, while inland marine covers domestic shipment, transporting instrument and open perils on personal property.
The insured negligence resulting into property or bodily injury to others is covered under casualty insurance category also referred as liability insurance. The casualty coverage includes other lines of coverage such as crime, boiler, machinery and aviation.
Property insurance policy can be structured to impose limits on coverage, where such limits exists the policy holder can exercise the ability of endorsing the policy to eliminate the limit or request for the inclusion of greater coverage of property. The option is exercised at extra cost on premium. Property insurance can allow limited coverage for a specified property, or allow different limit on schedule type of property or blanket the limit to various locations of property. The limit clause is imposed by the insurers to regulate the risks exposures.
Some of the reasons why property insurance can be cancelled include nonpayment of the premiums, change in the risk insured, discovery of criminal conviction that increases the hazard insured against, negligence or omissions by insured that increases the covered risk, failure to take precaution to mitigate against possibility of losses, the insured business activities changes which increases the risk, or other determination as decided by commissioner or law which finds the insurer in violation of law or in risk of insolvency.
Because of society confidence required to sustain the insurance industry, in case of a company becoming in solvency, other strong market players are always willing to absolve policies written by Insolvency Company and assume them at their original terms. The property insurance creates a cushion for a new begging after property loss due to happening of a disaster.