What is Commercial "Property" vs "Liability"

This is embarrassing because i think i should get it by now, but are are the real distinctions between a “property” and “liability” style claim? Because it seems to me that a “liability” style claim is a claim where the insured has cause some, any, damages to a third party and liable for trying to make things right through either repair of physical/tangible property, or medical bills or other “harm”(slander?libel?data breach?).

Where property is basically everything else. This includes intuitive “property” exposures like physical structures and business personal property, but also less intuitive exposures like employee theft.

Is there an easier rule of thumb to embrace the distinctions between “property” and “liability” ?

Till all are one,


Briefly and as an over-simplification, property claims are for damages to your tangible things of value, while liability claims are for when you are legally responsible for the property damage or bodily injury to others that you caused. Liability claims may be settled through the court system with the amount of damages decided by a jury, and including non-economic damages like “pain and suffering.” (Yes, there are many exceptions to the above.)


In the realm of personal auto, i asked the same question many years ago: what’s the difference between “physical damage” and “property damage”? Phys dam is first party coverage, for the auto of the insured. Property damage is third party coverage for when the insured is liable for damaging someone else’s property. (And includes driving into/damaging structures and stuff, not just other cars.)

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Exactly! And this is a source of frustration, because in this case “property damage”=“some one else” but in commercial lines “property damage”=“yourself”. It also doesn’t help that property damage and physical damage are both abbreviated “PD”

The above said, do you agree with calling employee theft or a data breach to an insured “property damage” when classifying internally, or would something else be more appropriate?

The first party commercial line is usually just called “property”, not “property damage”. But i agree that the terms are confusing, and not 100% consistent

I definitely don’t like “Property Damage” for personal auto, especially because Property Damage, together with BI and UM, is a liability coverage, which makes it more confusing.

Hey it’s a Jerry Tuttle sighting !


fwiw, back when I was the reserving actuary for a major GL carrier, we split our GL into BI and PD – liability for damaging people (bodily injury) and for damaging anything else (property damage). The BI GL was much more consistent and easier to predict, and the PD GL was all over the place, but made more sense without the BI mucking it up. And yes, that’s what we called the two pieces, BI and PD.

I’ve never called the actual first-party property coverage “PD”, it’s always been “property”, or for auto, “phys dam”.

Yes, alive and well in Fort Myers, Florida. Nearby neighbor Wayne Fisher and I have adopted Florida Gulf Coast University to encourage the actuarial profession.

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I always found this to be one of the dumbest terminology conventions. Like, English language, physical damage to my own car is still damage to property that has occurred.

I have seen APD mean auto physical damage. Which again I thought was dumb because people would assume that was just a commonly known convention, when in my mind it could commonly be mistakes for auto liability property damage.

This is just one of the abbreviations that is standard when you look at this every day.

BI/PD is Bodily Injury and (3rd party) property damage.

APD is (1st party) auto physical damage, which is usually further split into Collision and other than collision.

UM is uninsured motorists
UIM is underinsured motorists.

Distinguishing between these was a problem for me for a long time because the ‘I’ in ‘UIM’ can still stand for ‘insured’ in either case. Eventually I just equated the longer abbreviation with having more syllables and went with that. Still have to think about it though.

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Uninsured is a single word.

Under Insured can be viewed as two words; even though it’s often presented as a single “underinsured” word.

Too much thinking. I have enough to think about. :brain:


Yes, I would consider employee theft and data breach to an insured as property claims. These are damages to your things of value. I suppose we can debate whether data is tangible.

In a large enough insurance company, underwriting and claims departments are partitioned into people mostly responsible for property and mostly responsible for liability. If you had a question about employee theft or data breach, I think you would more likely find the company expert in the property department.

The above is again an over-simplification. Some companies are not so partitioned, and some policies such as CMP and Business Owners are multiline and possibly handled by one individual rather than two, especially in underwriting.

Why is this property versus liability distinction important to you?