Additional Insured
A person or organization added to an insurance policy who receives protection under the named insured’s coverage.
Aggregate Limit
The maximum amount an insurance policy will pay for all covered losses during the policy period.
Binder
A temporary insurance contract that provides proof of coverage until a formal policy is issued.
Broker
An insurance professional who represents the buyer and helps obtain the best coverage and pricing from multiple insurance carriers.
Certificate of Insurance (COI)
A document that provides proof of insurance, listing coverage types, limits, and effective dates.
Claim
A request made to an insurance company for payment due to a loss covered by the policy.
Coverage Limit
The maximum amount an insurer will pay for a covered loss.
Deductible
The amount the policyholder must pay out of pocket before the insurance company pays a claim.
Endorsement / Rider
A written amendment to an insurance policy that changes its terms, adds coverage, or modifies limits.
Exclusion
A specific condition or circumstance not covered by an insurance policy.
General Liability Insurance
Coverage that protects businesses from claims involving bodily injury, property damage, and certain personal injuries.
Indemnification
An agreement where one party compensates another for losses or damages.
Liability
Legal responsibility for actions or inactions that cause harm to another person or property.
Named Insured
The individual or business explicitly listed on the insurance policy as the primary policyholder.
Occurrence
An event that results in a loss. In insurance, this determines how and when coverage applies.
Premium
The amount a policyholder pays for insurance coverage, typically monthly, quarterly, or annually.
Risk Management
The process of identifying, assessing, and reducing potential risks to a business.
Subrogation
The insurer’s right to pursue a responsible third party after paying a claim to recover some or all of the money paid.
Underwriter
A professional who evaluates risk and determines policy pricing, terms, and eligibility.
Umbrella Insurance
Additional liability coverage that extends beyond the limits of primary policies such as general liability or auto liability.
Workers’ Compensation Insurance
Coverage that pays for medical expenses and lost wages for employees injured on the job.
Adverse Selection
When applicants with a higher-than-average likelihood of loss seek insurance at standard rates, creating increased risk for the insurer.
Application (App)
A formal request for insurance coverage that includes personal, business, or risk-specific information used in underwriting decisions.
Appetite (Underwriting Appetite)
The types and levels of risk an insurance company is willing to accept based on its underwriting guidelines.
Binder
A temporary contract providing insurance coverage until the official policy is issued.
Capacity
The maximum amount of exposure or total limits an insurer is willing or able to write.
Carrier
The insurance company that provides the policy and assumes the risk.
Certificate of Insurance (COI)
Proof of insurance showing active coverage limits, often required for contractors, vendors, and business agreements.
Claims History / Loss History
A record of past claims used to evaluate the risk of insuring an applicant.
Declination (Decline)
Occurs when an insurance carrier refuses to offer coverage due to risk factors or underwriting criteria.
Deductible
The amount the insured must pay out-of-pocket before the insurance company pays a claim.
Exposure
The potential for loss, based on factors like location, operations, industry, driving habits, or property values.
Financial Underwriting
Review of an applicant’s financial condition to determine appropriate coverage limits—common in life, disability, and business insurance.
Fronting Carrier
An insurer that issues a policy but transfers risk to another entity through reinsurance arrangements.
Guidelines (Underwriting Guidelines)
Rules and criteria used by insurers to determine whether to accept, rate, or decline a risk.
Hazard
A condition that increases the likelihood or severity of a loss (e.g., poor wiring, dangerous operations, adverse driving record).
Indemnity
The principle that insurance restores the insured to their financial position before the loss, without profit.
Insurability
The measure of risk an applicant presents based on underwriting criteria such as age, health, claims history, or business activities.
Limit of Liability (Policy Limit)
The maximum amount an insurance policy will pay for a covered claim.
Loss Control / Risk Control
Steps taken to reduce the frequency or severity of claims (e.g., safety programs, fire suppression systems, training).
Loss Ratio
A key underwriting metric: claims paid ÷ premiums earned. Lower ratios indicate more profitable books of business.
Manual Rate
A baseline premium set by the insurer before applying credits, debits, or unique underwriting factors.
Moral Hazard
The likelihood that an insured’s behavior could increase the chance of loss (e.g., fraud risk, carelessness).
Mortality & Morbidity Tables
Statistical tables used by life and health insurers to predict expected claims over time.
Preferred Risk
An applicant categorized as low-risk based on favorable underwriting factors (e.g., strong credit, no claims, safe operations).
Premium
The amount paid for insurance coverage, determined by underwriting factors, exposure, and risk classification.
Rate / Rating
The price assigned to a risk based on exposure, claims data, and underwriting analysis.
Reinsurance
Insurance purchased by insurance companies to transfer part of their risk to another carrier.
Retention
The amount of risk an insurer keeps on its own books before reinsurance applies.
Schedule Rating
An underwriting tool that adjusts premiums up or down based on risk characteristics not included in manual rating.
Substandard Risk
A higher-risk applicant who can still be insured but at increased rates or with policy restrictions.
Surplus Lines Insurance
Coverage placed with non-admitted carriers for hard-to-insure or specialized risks outside traditional underwriting appetite.
Underwriting
The process insurers use to evaluate risk, determine eligibility, assign premiums, and set policy terms.
Underwriter
A professional responsible for assessing risks and deciding whether to approve, modify, or decline coverage.
Waiver
The voluntary relinquishment of a known right—often refers to underwriting requirements or exclusions.
Written Premium
Total premium issued by an insurer, whether collected or not, for underwriting and financial reporting.
Actual Cash Value (ACV)
The value of damaged property at the time of loss, after accounting for depreciation.
Adjuster / Claims Adjuster
A professional—employed by the insurer, independently, or by the policyholder—who investigates claims, evaluates damages, and determines settlement amounts.
Appraisal Clause
A policy feature that allows disputes about the value of a claim to be resolved by independent appraisers and a neutral umpire.
Assignment of Benefits (AOB)
An agreement that allows a contractor or service provider to bill the insurer directly for repairs or services.
Claim
A formal request made by the policyholder to the insurer for payment under the terms of the policy.
Claimant
The person or entity making a claim may be the policyholder or a third party.
Coverage Determination
The insurer’s conclusion on whether the loss is covered under the terms of the policy.
Date of Loss (DOL)
The specific day the damage, accident, or event occurred.
Declaration Page (Dec Page)
The first page of the policy summarizes coverages, limits, deductibles, and endorsements—often required during claims.
Deductible
The amount the policyholder must pay out of pocket before the insurer will pay for a covered claim.
Depreciation
The reduction in value due to age, wear, or condition, applied to calculate ACV.
Exclusion
A specific loss, peril, or circumstance that is not covered by the policy.
First-Party Claim
A claim filed by the policyholder directly with their own insurance company for covered damages.
Independent Adjuster
An adjuster who works for an independent firm, not directly for the insurance company.
Loss
Damage, injury, or financial harm experienced by the insured or a third party.
Loss Assessment
Fees charged by a condo or HOA to cover a shared loss that may be covered under certain policies.
Loss of Use
Coverage that reimburses additional living expenses or business income loss when the insured property cannot be used due to a covered claim.
Mitigation
Reasonable steps are taken to prevent further damage after a loss, such as tarping a roof or shutting off water.
Occurrence
An accident or repeated exposure to conditions resulting in a loss. Often used to determine claim triggers and limits.
Property Damage
Physical damage to tangible property of the insured or another party.
Proof of Loss
A formal statement provided by the policyholder detailing the amount of loss, required for some claims.
Public Adjuster
A licensed adjuster hired by the policyholder to represent their interests in the claims process.
Replacement Cost Value (RCV)
The cost to replace or repair damaged property with new materials of a similar kind and quality, without depreciation.
Reservation of Rights (ROR)
A notice from the insurer stating they are investigating the claim, but reserve the right to deny coverage later.
Salvage Value
The remaining value of damaged property that the insurance company may recover after paying a claim.
Settlement
The amount agreed upon by the insurer and claimant to resolve a claim.
Subrogation
The insurer’s right to pursue a third party who caused the loss, after paying the insured’s claim.
Supplemental Claim
An additional claim is submitted when new damage is discovered or when repair costs exceed initial estimates.
Third-Party Claim
A claim made against the insured by someone alleging injury or property damage.
Additional Insured
A person or organization added to your policy who receives liability protection under your coverage.
Aggregate Limit
The maximum amount an insurer will pay for all claims during a policy period.
Binder
A temporary contract that provides proof of insurance until the full policy is issued.
Blanket Coverage
A single coverage limit that applies to multiple locations, buildings, or types of property.
Business Interruption Insurance
Coverage that replaces lost income and pays operating expenses when your business is unable to operate due to a covered loss.
Business Personal Property (BPP)
Covers furniture, inventory, equipment, and other movable property owned by the business.
Certificate of Insurance (COI)
A document showing proof of insurance, including coverage types, limits, and policy dates—often required by landlords and vendors.
Commercial General Liability (CGL)
Coverage that protects a business from bodily injury, property damage, and personal injury claims.
Commercial Property Insurance
Coverage for buildings, tools, equipment, and business contents damaged by fire, theft, storms, and other hazards.
Cyber Liability Insurance
Covers losses related to data breaches, cyberattacks, ransomware, and privacy violations.
Deductible
The amount the policyholder must pay before insurance covers the remainder of a claim.
Directors & Officers Insurance (D&O)
Protects company leadership against claims alleging mismanagement, errors, or wrongful acts.
Employment Practices Liability Insurance (EPLI)
Coverage for claims made by employees alleging wrongful termination, discrimination, harassment, or retaliation.
Errors & Omissions Insurance (E&O)
Also known as Professional Liability Insurance, it covers financial losses caused by professional mistakes or negligence.
Exclusions
Specific events, conditions, or types of property that are not covered under the policy.
General Liability Limit
The maximum amount the insurer will pay per occurrence or in total for liability claims.
Inland Marine Insurance
Covers mobile equipment, tools, and goods in transit—not limited to “marine” use.
Liability
Legal responsibility for injury or damage to another person or property.
Named Peril
A policy that covers only the specific risks listed (e.g., fire, windstorm, vandalism).
Occurrence
An event or accident that results in a loss—used to determine claim eligibility.
Premium
The amount a business pays for insurance, typically monthly or annually.
Products & Completed Operations
Covers bodily injury or property damage caused by products you sell or work you’ve completed.
Professional Liability Insurance
Protects service-based businesses against claims of negligence, misrepresentation, or professional errors.
Property Damage
Physical damage to tangible property of another party.
Risk Management
The process of identifying, evaluating, and reducing business risks.
Subrogation
The insurer’s right to recover claim payments from a third party who caused the loss.
Umbrella Liability Insurance
Additional liability protection that extends beyond the limits of General Liability, Auto Liability, and Employers Liability.
Workers’ Compensation Insurance
Covers medical expenses and lost wages for employees injured on the job.
Actual Cash Value (ACV)
The value of your vehicle at the time of a loss, factoring in depreciation.
Additional Insured
A person or business added to your policy who receives some liability protection.
Bodily Injury Liability
Coverage that pays for injuries you cause to others in an accident.
Business Use
Use of a vehicle for work tasks such as deliveries, service calls, or transporting tools.
Collision Coverage
Pays to repair or replace your vehicle if it is damaged in a crash, regardless of fault.
Comprehensive Coverage
Covers damage from events other than a crash, such as theft, vandalism, fire, or severe weather.
Covered Auto
Any vehicle listed on your policy or defined as covered based on the policy symbols.
Deductible
The amount you pay out of pocket before your insurance pays.
Endorsement
A change to your policy that adds, removes, or modifies coverage.
Exclusion
A situation or type of loss that the policy does not cover.
Hired Auto
Vehicles you lease, rent, or borrow for business use.
Hired Auto Liability
Covers liability for vehicles your business rents or borrows.
Liability Coverage
Pays for injuries or property damage you cause while driving for business.
Medical Payments
Helps cover medical expenses for you and your passengers after an accident, regardless of fault.
Non-Owned Auto
Vehicles your business uses but does not own, such as employee-owned cars used for work tasks.
Personal Injury Protection (PIP)
Covers medical costs and sometimes lost wages, no matter who caused the accident. Availability varies by state.
Physical Damage Coverage
Includes Collision and Comprehensive coverage for your vehicle.
Property Damage Liability
Pays for damage you cause to someone else's property.
Scheduled Auto
A specific vehicle listed on your policy for coverage.
Symbol
A code on your policy that defines which autos are covered for each type of coverage.
Total Loss
When the cost to repair a vehicle is more than its value or meets the insurer's threshold for being declared a loss.
Aggregate Limit
The most the policy will pay for all claims during the policy period.
Attachment Point
The dollar amount at which the umbrella or excess policy begins to pay after the underlying coverage is used up.
Commercial Umbrella Policy
Extra liability protection that sits on top of your primary policies and can also fill some coverage gaps.
Excess Liability Policy
Extra liability protection that increases your limits but usually follows the terms of your underlying policies without adding new coverage.
Follow Form
The excess or umbrella policy uses the same rules, exclusions, and coverage terms as the underlying policy unless stated otherwise.
Gap Coverage
Protection is provided when the umbrella policy covers something the underlying policy does not.
Horizontal Exhaustion
When all required underlying policies must pay up to their limits before the umbrella or excess policy responds.
Occurrence
An event or accident that results in a claim.
Primary Policy
The main policy that pays first such as general liability, auto liability, or employers' liability.
Retention
An amount you are responsible for when a claim is not covered by the underlying policy but is covered by the umbrella. Similar to a deductible.
Self-Insured Retention (SIR)
Your share of the loss before the umbrella policy pays when no underlying coverage applies.
Umbrella Limit
The total amount of protection available under the umbrella policy.