Insurance Terms Glossary
Understand insurance jargon with plain English definitions and real-world examples. Find any insurance term you need to know.
Search Insurance Terms
Look up any insurance term to understand what it means and how it applies to your business.
All Insurance Terms
Browse all insurance terms alphabetically.
Aggregate Limit
The maximum amount an insurance company will pay for all claims during the policy period.
Example:
If you have a $2M aggregate limit, the insurer won't pay more than $2M total for all claims in one year.
Bodily Injury
Physical injury to a person, including sickness, disease, or death.
Example:
If a client slips and falls in your office and breaks their arm, that's bodily injury.
Business Owners Policy (BOP)
A bundled insurance policy that combines general liability and commercial property coverage.
Example:
A BOP typically includes general liability, property insurance, and business interruption coverage.
Claims-Made Policy
Insurance that covers claims made during the policy period, regardless of when the incident occurred.
Example:
If you have a claims-made E&O policy, you must report claims while the policy is active.
Commercial General Liability (CGL)
Standard business liability insurance that covers bodily injury, property damage, and personal injury.
Example:
CGL protects your business if someone is injured on your premises or by your operations.
Coverage Territory
The geographic area where your insurance coverage applies.
Example:
Most policies cover the US and Canada, but international coverage may require additional endorsements.
Cyber Liability Insurance
Insurance that protects against data breaches, cyber attacks, and privacy violations.
Example:
If your business is hacked and client data is stolen, cyber liability covers notification costs and legal fees.
Deductible
The amount you pay out-of-pocket before insurance coverage kicks in.
Example:
If you have a $1,000 deductible and a $5,000 claim, you pay $1,000 and insurance pays $4,000.
Errors & Omissions (E&O)
Professional liability insurance that covers mistakes, oversights, and service failures.
Example:
If you miss a deadline and a client sues for lost revenue, E&O insurance covers the claim.
Exclusion
Specific situations or circumstances that are not covered by the insurance policy.
Example:
Most E&O policies exclude intentional wrongdoing or criminal acts.
General Liability
Insurance that protects against bodily injury, property damage, and personal injury claims.
Example:
If a client trips over a cord in your office and gets hurt, general liability covers the medical costs.
Indemnification
The process of compensating someone for loss or damage.
Example:
Your insurance company indemnifies you by paying claims on your behalf.
Liability Limit
The maximum amount an insurer will pay for a single claim or occurrence.
Example:
A $1M per occurrence limit means the insurer won't pay more than $1M for any single claim.
Occurrence Policy
Insurance that covers incidents that occur during the policy period, even if claims are filed later.
Example:
If you have an occurrence policy and cancel it, you're still covered for incidents that happened while it was active.
Per Occurrence Limit
The maximum amount an insurer will pay for any single incident or claim.
Example:
If you have a $1M per occurrence limit, that's the most the insurer will pay for any one claim.
Premium
The amount you pay for insurance coverage, typically on a monthly or annual basis.
Example:
If your annual premium is $2,400, you might pay $200 per month for coverage.
Professional Liability
Insurance that protects professionals against claims of negligence or inadequate work.
Example:
Doctors, lawyers, consultants, and other professionals need professional liability insurance.
Property Damage
Physical damage to someone else's property caused by your business operations.
Example:
If you accidentally damage a client's computer while working on it, that's property damage.
Retroactive Date
The earliest date from which claims can be covered under a claims-made policy.
Example:
If your policy has a retroactive date of January 1, 2020, it covers incidents from that date forward.
Rider
An addition or modification to an insurance policy that changes coverage terms.
Example:
You might add a rider to cover additional equipment or increase coverage limits.
Subrogation
The right of an insurance company to recover money from a third party who caused a loss.
Example:
If someone else's negligence caused your claim, your insurer may subrogate against them.
Umbrella Insurance
Additional liability coverage that kicks in when other policies reach their limits.
Example:
If your general liability limit is $1M and you have a $2M umbrella, you have $3M total coverage.
Workers Compensation
Insurance that covers medical expenses and lost wages for employees injured on the job.
Example:
If an employee gets hurt at work, workers comp covers their medical bills and lost wages.
Common Insurance Categories
Browse terms by category to better understand different types of insurance coverage.
General Liability Terms
- • Bodily Injury
- • Property Damage
- • Personal Injury
- • Advertising Injury
- • Coverage Territory
- • Occurrence Policy
Professional Liability Terms
- • Errors & Omissions (E&O)
- • Professional Liability
- • Claims-Made Policy
- • Retroactive Date
- • Indemnification
- • Subrogation
Policy Structure Terms
- • Premium
- • Deductible
- • Coverage Limit
- • Aggregate Limit
- • Per Occurrence Limit
- • Rider
Specialized Coverage Terms
- • Cyber Liability
- • Workers Compensation
- • Business Owners Policy (BOP)
- • Umbrella Insurance
- • Commercial General Liability (CGL)
- • Exclusion
Quick Reference Guide
Essential terms every business owner should know when shopping for insurance.
Coverage Basics
Policy Types
Coverage Types
Limits & Coverage
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