Business Insurance Glossary

ACORD 25 form

This is an industry standard form used to create a certificate of insurance (COI).

Actual Cash Value (ACV)

This is the method of determining the value of property that has been damaged. It is based on the cost to repair or replace the property, less depreciation.

Additional Insured

This is another person or business who is not the named insured but is listed on your insurance policy. An additional insured also can file claims of their own under the policy. Additional insureds can be listed individually or on a blanket basis. For example, a construction company with this type of endorsement could extend coverage under their policy to contractors and subcontractors.

Aggregate Limit

This is the maximum amount an insurer will pay for covered losses over a specified period of time.

Appraisal

An appraisal is an assessment of a property's value by an independent professional.

Arbitration

An alternative to going to court where a neutral third-party is used to settle a dispute. In insurance, the dispute is between an insurer and a policyholder.

Bodily Injury

This can include physical injury, sickness, or disease.

Builder’s Risk Insurance

A specialized type of property insurance designed to cover materials, fixtures, and/or equipment used in the building or renovation of a structure in case of a loss or damage.

Business

An organization that produces and sells products or provides a service. Businesses can be structured as a sole proprietorship, partnership, limited liability company (LLC), among others.

Business Interruption Insurance

Also known as Business Income Insurance, this coverage helps cover business' income and operational expenses associated with a covered loss that requires a business to suspend operations, such as after a fire or damage to property on the premises.

Business Owner’s Policy (BOP)

A policy that combines different types of coverage, often general liability and commercial property insurance.

Business Personal Property (BPP)/Business Contents Insurance

This covers the cost to repair or replace business property, such as computers, furniture, and inventories if they’re lost, damaged, or stolen. It generally does not cover property stolen by an employee.

Certificate Holders

This is a person or entity who has a certificate of insurance (COI) in their possession. That could be the policyholder, or a person or entity who has asked the policyholder for a COI to prove the policyholder has insurance. Being a certificate holder does not necessarily mean you are covered by the policy.

Certificate of Insurance (COI) Also known as: ACORD 25 form

This is a document your insurer provides to prove you have an insurance policy. It summarizes important information about the policy, such as types and limits of your coverage, your insurance provider, policy number, named insured(s), and coverage start and end dates.

Claim

A demand for your insurance company to pay for a loss.

Claimant

The person or business that makes a claim to the insured person or their insurance company.

Claims-Made Insurance Policy

This type of policy covers claims that are made against the insured during the policy period. Claims made after the policy ends would not be covered.

Class of Business (COB)

This refers to the type of industry your business falls into, for instance “construction” or “professional services.” It is used in the insurance industry to help insurers easily determine risk in order to set coverage limits and premium costs.

Commercial Auto Insurance

This type of policy covers vehicles owned by a business and their use for business purposes.

Commercial Property Insurance

This insurance covers your building and other business property from loss or damage due to a fire, storm, or other natural disaster. It generally doesn't not cover damage from earthquakes or floods.

Endorsement

An insurance policy form that changes or adds to the provisions included in one or more other forms used to create the policy. An Additional Insured is an example of an endorsement.

Inland Marine

This type of policy can help to cover costs if your tools and equipment get damaged, lost, or stolen while in transit or while temporarily stored at a place other than your main business location.

Loss Payable Provision

This is an endorsement where an insurer makes a claim payment to a third party for a loss instead of the named insured or beneficiary. It’s often included when more than one person has a financial interest in property or equipment. For example, the bank who financed the purchase of your company van could be added to a loss payable provision.

Loss Payee

The loss payee is the person who is entitled to payment when an insurance claim is settled. In some cases, that’s the policyholder. Loss payees are included in a Loss Payable Provision.

Primary and noncontributory (PNC)

'Primary' means your insurance policy will respond to a covered claim first before another policy that may cover the same claim. 'Non-contributory' means that the policy is required to respond to a covered claim without requesting that the other policy contribute to paying for that claim. This endorsement can be added when an additional insured is covered under the policy.

Products-Completed Operations Aggregate

This is the maximum amount of coverage offered under a general liability insurance policy, which covers you for claims and lawsuits related to injury, illness or property damage caused by your delivered product or completed service.

Rider

This is also known as an Endorsement (see definition above)

Waiver of Subrogation (WOS)

Subrogation is a right your insurer may have under an insurance policy to recoup costs from a negligent third-party on a claim paid under your insurance policy. For example, a subcontractor on your project damages one of your equipment storage sheds. Your insurer pays you for the claim and then pursues the subcontractor’s insurance company to recover the money.

A “waiver of subrogation” is an endorsement on an insurance policy that prevents your insurer from recovering money it paid for a loss from a negligent third-party.