Glossary
Business Insurance Glossary
Policy language and contract language often overlap. Start with definitions, then read the actual forms.
Reviewed July 6, 2026. Educational guide, not a quote or coverage decision.
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Each page is meant to help a business owner ask better questions before quotes, contracts, renewals, certificates, or claims.
Additional InsuredA person or organization added to a liability policy for certain coverage rights under an endorsement.Aggregate LimitThe most a policy will pay for all covered claims during the policy period.Auditable PolicyA policy where final premium may be adjusted after reviewing payroll, revenue, or other exposure figures.Bailee CoverageCoverage for customer property in the business's care, custody, or control.BinderTemporary evidence that coverage has been arranged before final policy documents are issued.Bodily InjuryPhysical injury to a person, often part of a general liability or auto liability claim.Business IncomeCoverage for income loss after covered property damage interrupts operations.Business Owners PolicyA package policy often combining general liability and commercial property for eligible businesses.Certificate HolderThe person or organization shown on a certificate of insurance as receiving proof of coverage.Certificate of InsuranceA document summarizing insurance policies, limits, effective dates, and insurer information.ClaimA request for coverage, payment, or defense under an insurance policy.Claims-Made PolicyA policy that generally responds to claims first made during the policy period, subject to terms.Class CodeA code used to classify business operations, especially in workers compensation rating.Commercial AutoInsurance for vehicles used in business operations.Commercial PropertyCoverage for business buildings, contents, equipment, inventory, and related property.Completed OperationsLiability arising after work has been completed.Contractual LiabilityLiability connected to obligations assumed in a contract, subject to policy terms.DeductibleThe amount the insured pays before the policy pays for a covered loss.Declarations PageThe policy summary showing named insured, limits, premiums, forms, and policy dates.EndorsementA policy form that changes, adds, or removes coverage.Experience ModifierA workers compensation factor based on loss experience compared with expected losses.ExclusionPolicy wording that removes coverage for certain causes, claims, or operations.General LiabilityCoverage for certain third-party injury, property damage, personal injury, and advertising injury claims.Hired AutoVehicles rented or hired for business use.Indemnity AgreementContract language requiring one party to pay certain losses or claims for another party.Inland MarineCoverage for movable property, tools, equipment, and property away from fixed locations.Insured ContractA contract category defined in liability policy language.LimitThe maximum amount the policy will pay for a covered claim or benefit.Loss RunA report showing past claims history for a policy or insured.Named InsuredThe business or person listed on the policy with primary rights and responsibilities.Non-Owned AutoVehicles not owned by the business but used for business purposes.Occurrence PolicyA policy that generally responds to covered events occurring during the policy period.Per Occurrence LimitThe most a policy pays for one covered occurrence.PremiumThe price paid for insurance coverage.Primary and NoncontributoryEndorsement wording about a policy responding before another party's insurance contributes.Professional LiabilityCoverage for certain allegations involving professional services, errors, or omissions.Property DamagePhysical damage to tangible property, often part of liability or auto claims.RetentionAn amount retained by the insured before coverage responds, similar to a deductible in some policies.Retroactive DateA date in claims-made policies before which incidents may not be covered.Risk ControlPractices intended to reduce the chance or severity of losses.Scheduled PropertyProperty specifically listed on a policy or endorsement.Self-Insured RetentionAn amount the insured must handle before the insurer's obligation begins.SubcontractorA separate business hired to perform part of a project or service.SublimitA smaller limit within a policy for a specific type of loss or property.Umbrella PolicyA policy providing additional liability limits over scheduled underlying policies.UnderwriterA person or company evaluating eligibility, pricing, and policy terms.Waiver of SubrogationAn endorsement affecting an insurer's ability to seek recovery from another party.Workers CompensationCoverage for employee work-related injuries or illnesses, subject to state rules.Employer LiabilityA part of workers compensation policies for certain employer liability claims.Payroll AuditA review of payroll records to calculate final premium on auditable policies.Additional PremiumPremium due after changes, audits, endorsements, or exposure updates.CancellationEnding a policy before the expiration date under policy and state rules.NonrenewalA decision not to continue coverage after the policy term ends.Policy PeriodThe effective dates during which a policy is active.Proof of CoverageEvidence that a policy is in force, often shown through a certificate.SubrogationAn insurer's right to seek recovery from another responsible party after paying a loss.