Insurance Glossary
Welcome to our Insurance Glossary! We understand that insurance jargon can be confusing, and that’s why we’ve created this comprehensive guide. Here, you’ll find clear explanations for various insurance terms you might encounter in your policy or in our blogs. Simply pick a letter to find the term you’re looking for. Let’s make insurance more accessible and understandable together.
A- Rated Insurance Carrier
This refers to an insurance company that has received an A-, or “excellent” rating, from a credit rating agency like A.M. Best. The rating is an indicator of the company’s financial strength and ability to meet its ongoing insurance policy and contract obligations. |
Add on
In insurance, an add-on refers to additional coverage or extra features added to a standard insurance policy. These can enhance protection by covering risks not included in the base policy. |
Additional Insured
A person or entity that is added as an insured under the insurance policy when required by a written contract. The named insured’s policy provides some insurance benefits from the policy but only for the insured’s business activities that cause or contribute to a claim. |
Admitted Company
An insurance company that is approved to do business in a specific state or country. |
Admitted Insurer
An insurance company that has been approved by a state’s insurance department. |
Aggregate
The maximum amount an insurance policy will pay over a defined period. |
Appointed Agent
An insurance agent who is authorized to represent a specific insurance company. |
Appointee
An individual who is designated to perform certain duties or responsibilities. |
Benefits
Benefits in insurance refers to the protections and advantages your policy offers. |
Binder
A temporary insurance contract that provides proof of coverage until a permanent policy is issued. |
Broker
A professional who sells and services insurance policies. |
Brokerage
A firm that acts as a broker in buying and selling insurance policies. |
Business Personal Property
Personal property owned by a business, such as furniture, fixtures, and equipment. |
Carrier
Another term for an insurance company that “carries” the insurance. |
Certificate Holder
The individual or entity that is provided a certificate of insurance as evidence of the insurance coverage. |
Certificate of Insurance (COI)
A document that provides evidence that certain general types of insurance coverages and limits have been purchased by the person or organization listed on the certificate. |
Claims-Made Policy
An insurance policy that provides coverage for claims that occur and are reported during the policy period. |
Commercial General Liability (CGL)
A type of insurance policy that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business’s operations, products, or injury that occurs on the business’s premises. |
Commercial Lines
Products designed for and bought by businesses. These insurance products are usually packaged together in a single policy. |
Commercial Property Policy
An insurance policy for businesses that insures against damage to their buildings and contents due to a covered cause of loss. |
Commission
The fee that an insurance agent or broker receives as a percentage of the policy premium. |
Completed Operations
A term referring to the liability coverage of an individual or organization for any damage caused by operations that were completed and are no longer in process. |
Coverage Details
Specific information about the insurance coverage including the risks covered, the limits of indemnity, and the period of coverage. |
Coverage Limits
The maximum amount that an insurance company will pay out for a covered loss. |
Cyber Liability Insurance
A policy designed to help an organization mitigate risk exposure by offsetting costs involved with recovery after a cyber-related security breach or similar event. |
Damage to Premises Rented to You
Coverage for a tenant’s liability for damage caused to rented premises. |
Data Breach
An incident in which sensitive, protected, or confidential data has potentially been viewed, stolen, or used by an individual unauthorized to do so. |
Declarations Page
The page in an insurance policy that shows the name and address of the insurer and insured, the policy period, the amount of insurance coverage, and the amount of the premium. |
Deductible
The amount of loss that the insured is responsible to pay before benefits from the insurance company are payable. |
Endorsement
A written amendment to an insurance policy that alters the policy’s coverage, terms, or conditions. |
Errors & Omissions
A professional liability insurance that protects companies and individuals against claims made by clients for inadequate work or negligent actions. |
Exclusion
A provision in an insurance policy that eliminates coverage for certain risks, people, property classes, or locations. |
General Liability Insurance
Insurance that covers a company for claims involving bodily injuries and property damage to a third party resulting from its products, services, or operations. |
Individual Aggregate Limit
The maximum amount an insurer will pay for all covered losses during a specified period of time, usually the policy term. |
Inland Marine Coverage (Tools and Supplies Coverage)
A type of insurance that covers goods, tools, equipment, and other property not fixed at a specific location. |
Insurance
A contract in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. |
Insurance Agency
A business that sells insurance policies. |
Insurance Agent
A person who sells insurance policies. |
Insurance Claim
A formal request to an insurance company asking for a payment based on the terms of the insurance policy. |
Insurance Policy
A contract between the insurer and the insured that determines the claims which the insurer is legally required to pay. |
Insurance Quote
An estimate of the cost of insurance based on information supplied to the insurance company by the applicant. |
Insured
The person or entity buying the insurance policy. |
License
A document issued by the state that gives permission to operate as an insurance agent, broker, or insurer within that state. |
Licensing
The process by which an individual or business obtains a license to operate. |
Limit of Insurance
The maximum amount of money that an insurance company will pay for a covered loss. |
Malware
Malicious software designed to cause damage to a computer, server, or computer network. |
Malware Attack
A cyber attack in which malware is used to breach a network. |
Master Policy
A policy that covers multiple insureds of a similar group of persons or businesses. Each individual or entity that is insured under a Master Policy is a Certificate Holder. |
Medical Expenses Limit
The insurance has a set maximum amount it will cover for accidents that aren’t your fault, which happen at or near your place. This amount includes payments for medical bills, lost wages, funeral costs, and other related expenses for someone else. |
Occurrence Form Policy
An insurance policy that covers claims arising from incidents that occur during the policy term, regardless of when the claim is filed. |
Occurrence Limit
The maximum amount an insurer will pay for all claims resulting from a single incident. |
Occurrence Policy
An insurance policy that covers claims arising from incidents that occur during the policy term, even if the policy is no longer in effect when the claim is filed. |
Package Policy
An insurance policy that combines coverage from several different types of insurance, such as liability and property insurance. |
Per-Occurrence Limit
The maximum amount an insurer will pay for a single claim or incident. |
Peril
A specific risk or cause of loss covered by an insurance policy, such as fire, windstorm, flood, or theft. |
Personal and Advertising Injury
A category of insurable offenses that produce harm, such as libel, slander, invasion of privacy, copyright infringement, and misappropriation of advertising ideas. |
Phishing
A cybercrime in which a target is contacted by email, telephone, or text message by someone posing as a legitimate institution to lure individuals into providing sensitive data. |
Phishing Scam
A fraudulent attempt to obtain sensitive information or data, such as usernames, passwords, and credit card details, by disguising oneself as a trustworthy entity in an electronic communication. |
Policy Term
The period of time for which an insurance policy provides coverage. |
Premiums
The amount of money an individual or business pays for an insurance policy. |
Product Defect
Any characteristic of a product which hinders its usability for the purpose for which it was designed and manufactured. |
Product Liability Insurance
Insurance that protects a company against claims due to injuries or damages caused by a product they manufactured or sold. |
Product Recall
The process of retrieving faulty products from customers, primarily focusing on notifying the market and ensuring these products are returned to the manufacturer. Typically, the costs of refund, replacement, or repair are not covered under most product recall procedures. |
Product Recall Insurance
Insurance that covers expenses associated with recalling a product from the market. |
Products & Completed Operations
A policy covering the liability for injuries or damage that result from the use of a product or the completion of a service. |
Professional Liability
Professional Liability is a type of insurance that safeguards professionals from claims arising from mistakes or oversights made during their service delivery. This includes beauty professionals and others who might inadvertently cause harm or financial loss to their clients. |
Property Insurance
Insurance that provides financial reimbursement to the owner or renter of a structure and its contents in the event of a covered loss such as fire or wind damage. Theft is not usually covered by property policies because it generally covers the building itself and anything permanently attached to the building. |
Qualifying Event
An incident or situation that triggers a change in a person’s eligibility for a benefit or insurance coverage. |
Rental Damage Insurance
Insurance that covers a renter’s liability for damage caused to a rental property. |
Retail Contract
A contract between a retailer (seller) and a customer (buyer) for the sale of a specific product or service. |
Retailer
A business or person that sells goods to the consumer, as opposed to a wholesaler or supplier who normally sells their goods to another business. |
Risk Purchasing Group
A group of businesses from the same industry that join together to buy liability insurance collectively from an insurance company. |
Shared Aggregate Limit
A single limit of liability that applies to more than one coverage in a policy. |
Standard Form (Standard Policy)
An insurance policy that is standardized and has set terms, conditions, and provisions. |
Transfer of Risk
A risk management technique where risk of loss is shifted from one party to another, such as through insurance or contract terms. |
Underwriter
A professional in an insurance company who decides whether an insurance risk is acceptable and, if so, at what rate the risk should be accepted. |
Wholesale Broker
An insurance broker who acts as an intermediary between a retail broker and an insurer. |
Wholesalers
Businesses that sell goods in large quantities to be retailed by others. |
Workers’ Compensation
A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue their employer for negligence. |
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