Insurance Terms

Insurance Terms

A sudden, unintended, unforeseen and unexpected event.

Aggregate Limit of Indemnity  
The maximum amount an insurer will pay for all accumulated claims arising within a specified period of insurance.

All Risk Insurance  
The name given to a policy which covers against the loss caused by all perils except those that are specifically excluded by the terms of the policy.

A contract for temporary insurance issued either in writing or orally pending issuance of a policy of insurance.

Blanket Coverage  
Coverage for liability and property that extends to more than one class of property, location, or employee.

Bodily Injury Liability  
Insurance protection against loss arising out of the liability imposed upon the insured by law for damages because of bodily injury, sickness or disease sustained by any person or persons other than employees.

Builders Risk Insurance  
Insurance designed to cover buildings in the course of construction. Also known as course of construction insurance.

Business Auto  
Coverage for vehicles used primarily for business purposes, or owned, leased or titled to a business. Also known as a fleet policy or commercial auto policy.

Business Interruption  
Loss of income due to property damage to a business facility.

Business Owner’s Policy  
Business insurance typically combining property, liability, and business interruption coverage.

Calendar Year Deductible  
In health insurance, the amount that must be paid by the insured policyholder in one calendar year before the insurer becomes responsible for additional costs.

A demand for payment under an insurance contract or bond. The estimated or actual amount of a loss incurred and covered under a policy agreement.

Commercial General Liability  
Coverage against third-party claims for injury, bodily injury, and property damage.

Convertible Term Insurance Policy  
A life insurance policy which may be converted from term to permanent without a medical assessment, and renewed regardless of the health of the insured subject.

Protection under an insurance policy. In property insurance, coverage lists perils insured against properties covered, locations covered, individuals insured, and the limits of indemnification. In life insurance, living and death benefits.

The amount of a loss paid by the policyholder.

Effective Date  
The date that coverage starts under an insurance contract.

This is a restriction in your business liability insurance limiting and/or excluding coverage for certain potential catastrophic events, people, property or locations.

Grace Period  
This is a period of time that insurance coverage continues beyond the actual expiration date of a policy that you intend to renew. A policy will lapse if the premium is not paid by the end of this period.

Gross Premium  
The total amount paid by insured.

A specific situation that introduces or increases the probability of the occurrence of a loss arising from a peril, or that may influence the extent of a loss.

Insurance Broker  
A person who sells, solicits, or negotiates insurance for a client.

Liability Insurance  
Provides protection from lawsuits of others.

Liability Limits  
The sum or sums beyond which a liability insurance company does not protect the insured on a particular policy. The majority of policies covering liability for bodily injury have two limits: a limit of liability to any one person; and another limit, usually higher, for any single accident where more than one person is involved.

Physical damage to a person or property, including loss of income or loss of use.

Minimum Premium  
The minimum amount an issuer will accept to issue a policy even if the gross premium is a lesser amount.

Named Insured  
The individual defined in the policy contract as the insured.

Named Peril  
Coverage for losses explicitly defined in the policy contract.

An accident or incident, including injurious exposure to conditions, neither expected or intended which results in bodily injury or property damage during the policy period.

Package Policy  
Two or more separate policies combined into one single contract. Also known as “bundling.”

The cause of personal injury or property damage, the cause of loss.

A written contract. Legally bound insurance agreement.

Policy Limit  
The policy limit is the dollar amount of coverage shown in the contract.

Proof of Loss  
A written document which must be filled by an insured when a loss occurs under a property insurance policy.

A written document which must be filled by an insured when a loss occurs under a property insurance policy.

An amendment to an insurance policy agreement.

The probability of an insured loss occurring.

Policy section stating the main details of the insured, their business activities, the application of any special terms or restrictions plus other details specific to the particular insurance and premium.

The insurance company’s right to pursue legal action in the policyholder’s name against the party considered legally liable for the loss or damage.

Third Party  
The person other than the insured who has incurred losses or is entitled to receive payments.