Business Insurance Terms

Adverse selection occurs when one party in an insurance transaction has more information about risks than the other, creating an imbalance that typically leads to ..Read more →

Assumed liability refers to the obligation of one party to take on the responsibility for the liabilities of another party. This can arise from contractual ..Read more →

Binding Authority is the power an insurance company grants to an agent to bind coverage and issue an insurance policy without needing prior approval from ..Read more →

In the context of business insurance, "blanket cover" and "blanket insurance" are closely related terms, but they can have slightly different connotations depending on the ..Read more →

Coverage limit covering multiple properties or locations. A blanket limit is an insurance term referring to a single coverage limit that applies to multiple properties ..Read more →

Insurance protecting against civil authority mandates. Civil Authority Coverage is a crucial aspect of business interruption insurance that provides financial protection when a business is ..Read more →

The Common Fund Doctrine is a legal principle that entitles a party who recovers a common fund for the benefit of others to reasonable attorney's ..Read more →

Coverage for income loss due to external disruptions. Contingent Business Interruption (CBI) insurance is a specific type of business interruption insurance that protects companies from ..Read more →

Insurance for cargo loss due to supplier failure. Contingent Cargo Coverage is an important type of insurance designed to protect businesses engaged in shipping goods ..Read more →

Eliminates deductible costs in specific insurance claims. A deductible waiver is a provision in certain insurance policies that allows insured individuals or businesses to file ..Read more →

Legal principle limiting recovery of purely economic losses. The Economic Loss Doctrine is a legal principle that prevents parties from recovering purely economic losses through ..Read more →

Coverage for high-risk businesses beyond standard limits. Excess and Surplus Insurance refers to specialized insurance products designed for businesses that do not fit into traditional ..Read more →

Exclusions are specific provisions within an insurance policy that eliminate or limit coverage for certain risks, hazards, circumstances, or property types that would otherwise be ..Read more →

In the context of Business Insurance, First-Party Coverage refers to insurance protecting a businesses' own assets and losses. First-party coverage is a foundational component of ..Read more →

Property damaged but still under the owner's control. Impaired Property coverage is a provision in business insurance policies that protects against claims arising when a ..Read more →

An indemnification clause is a contractual provision where one party (the indemnifier) agrees to compensate another party (the indemnitee) for losses, damages, or liabilities that ..Read more →

A bond ensuring compliance with court orders or judgments. A judicial bond is a type of surety bond required by a court that ensures compliance ..Read more →

A lapse in business insurance coverage occurs when a business insurance policy terminates or expires without being renewed, creating a period during which the business ..Read more →

Expenses incurred to defend against legal claims. Legal Defense Costs refer to the expenses associated with defending a business against lawsuits or legal claims. These ..Read more →

Legal Entity Cover is a type of business insurance that protects the company itself as a separate legal entity. It covers the entity for financial ..Read more →

The Made Whole Doctrine is an equitable defense to the subrogation or reimbursement rights of an insurance carrier, requiring that an insured must be fully ..Read more →

A named insured is the person or business entity explicitly identified and listed by name on the declarations page of an insurance policy. The named ..Read more →

A negligence clause is a contractual provision that allocates responsibility and potential liability between parties when one party fails to exercise reasonable care in performing ..Read more →

A non-admitted insurance company is an insurer that is not licensed by a particular state's department of insurance, but can still legally sell insurance policies ..Read more →

Overhead and Profit (O&P) refers to the additional costs included when calculating claim settlements to cover a business's indirect expenses and provide a profit margin ..Read more →

A per occurrence limit is the maximum amount an insurance company will pay for a single covered incident under the terms of your insurance policy. ..Read more →

Coverage for liability from personal and advertising harm. Personal and Advertising Injury coverage is an essential component of commercial general liability insurance. It protects businesses ..Read more →

Exclusion of coverage for punitive damage awards in insurance. The Punitive Damages Exclusion is a clause found in some insurance policies that specifically excludes coverage ..Read more →

Process of converting an insurance quote into a policy. The binding process is a critical stage in business insurance procurement that involves transitioning from a ..Read more →

A residual market is an insurance mechanism that serves as a coverage source of last resort for businesses and individuals who have been rejected by ..Read more →

A date determining coverage start for claims in insurance. The retroactive date is an important component of business insurance that indicates the starting point for ..Read more →

Risk-based capital (RBC) is a regulatory standard that determines the minimum amount of capital an insurance company must maintain based on its size and risk ..Read more →

A Risk Retention Group (RRG) is a member-owned liability insurance company formed under federal law that allows businesses with similar risk exposures to create their ..Read more →

Salvage and subrogation recoveries represent the funds an insurance company reclaims after paying a claim, either through selling damaged property (salvage) or by pursuing compensation ..Read more →

A risk evaluation method of adjusting premiums for specific businesses. Schedule Rating is a customized method in business insurance that calculates premiums based on the ..Read more →

Self-Insured Retention (SIR) is the amount a business must pay out of pocket before its insurance coverage begins. It is the portion of a loss ..Read more →

In business insurance, a severability of interests clause (also called separation of insureds) is a provision that treats each insured party as having separate coverage ..Read more →

Subrogation is a legal right held by insurance companies to pursue a third party responsible for causing an insurance loss to the insured, allowing the ..Read more →

Coverage for tenants against property damage claims. Tenant’s Legal Liability refers to a specific type of insurance coverage designed to protect tenants from financial responsibility ..Read more →

Underwriting profit is the net profit an insurance company earns from its core insurance operations, calculated by subtracting paid claims and operating expenses from collected ..Read more →

Uninsurable risk refers to a condition or potential loss that insurance companies cannot or will not cover, regardless of premium offered, due to the event's ..Read more →

Utmost Good Faith, also known by its Latin term "uberrima fidei," is a fundamental legal doctrine that legally obliges all parties to an insurance contract ..Read more →

A provision addressing uninsured property vacancy risks. A Vacancy Clause is an important provision in commercial property insurance policies that limits or excludes coverage for ..Read more →

Coverage for additional benefits to employees not mandated by law. The Voluntary Compensation Endorsement is a provision in business insurance that offers coverage for certain ..Read more →

A waiver of subrogation is a contractual provision whereby an insured party waives the right of their insurance carrier to seek compensation for losses from ..Read more →

Insurance covering assets on a business's yard. Yard Coverage is a specific type of insurance that protects businesses' assets located on their premises, particularly in ..Read more →