Glossary of Insurance Terms

Advertising Injury

Injury to your business resulting from inappropriate, incorrect or libelous advertising practices which emanate from other businesses.

Annual Aggregate

The maximum dollar amount that can be paid under a policy during a one-year period.

All-Risk

Insurance against loss or damage to property from any cause, except those that are specifically excluded.

Binder

Written acknowledgement that insurance applied for is in force, whether or not the premium had been paid or the policy issued.

BOP (Business Owners Policy)

A package insurance policy that is made up of multiple lines or types of insurance. A BOP usually includes property and general liability insurance.

Business Interruption Insurance

A type of policy that pays for loss of earnings when operations are curtailed or suspended because of a covered property loss.

Certificate of Insurance
A document which serves as proof of the types of coverage, amounts of coverage and policy effective dates of an insurance policy. Certificates are held by the insured or, in some cases, by a company or person to whom the insured is potentially liable.

Claims-Made Coverage

A policy providing coverage only if a claim is made during the policy period. If the policy has a retroactive date, a loss which occurred before that date is not covered. (See Occurrence Coverage for comparison.)

Electronic Data Processing Coverage

Specialized type of insurance designed to cover your computer equipment, data systems, information storage media and expenses or income loss related to the destruction of hardware or software.

Employee Dishonesty

Protection against allegations of employee theft of tangible or intangible property from a client. Coverage should be provided on your premises and at the customer's location.

Employer's Non-Owned Auto Liability

Liability faced by the employer when an employee uses his or her own personal vehicle on company business.

Employment Practices Liability Insurance (EPLI)

Protection against claims of discrimination based on age, gender, race, religion or other factors.

Errors and Omissions Coverage

Protection against claims that you or your employee made mistakes through error or oversight that caused a loss of productivity or loss of revenue.

Exclusions

Causes of loss, conditions or property specified in the policy which are not covered by the policy.

Extended Reporting Period

A specified period allowing someone to make claims after the expiration of a "claims-made" policy

Extra Expense Insurance

Insurance providing the extra funds needed to continue a business without interruption following a covered property loss.

Fidelity Bond

Protection against allegations of employee theft of tangible or intangible property from a client. Coverage should be provided on your premises and at the customer's location.

General Liability Insurance

Covers bodily injury and property damage liability for incidents that occur on holder's premises or at holder's customer's location. Hired Auto Liability Liability the employer is exposed to when a vehicle is rented in the company's name

Independent Contractor

A professional who contracts with a client to provide his or her services to the client for a specific amount of time for a specific rate, typically under the IRS classification of a 1099 employee

Limit of Liability per Occurrence

The maximum dollar amount the insurance company agrees to pay for any single loss.

Negligence

Failure to use that degree of care which an ordinary person of reasonable prudence would use under the given circumstances. Negligence may be constituted by acts either committed or omitted, or both.

Non-owned auto

Liability coverage an employer is exposed to when an employee is driving another employer's auto or an employee's personal auto.

Occurrence Coverage

A policy providing coverage only for injury or loss that occurs during the policy period, regardless of when the claim is made. For example, a claim made after expiration of a policy would be covered if the injury or loss occurred during the time the policy was in force. (See Claims-Made Coverage for comparison.)

Products Completed Operations

Coverage which protects against liability losses caused by the insured's products or by operations completed by the insured

Professional Liability Insurance

Liability insurance protecting professionals for loss or expense resulting from claims of mistakes, errors or omissions committed or alleged to have been committed by the insured in his professional activities. Also covers holder against claims of libel, slander and invasion of privacy.

Property Off-Premises

Property which is not in your place of business.

Property of Others

Property under your care, custody or control which you do not own.

Retroactive Date

Date on a claims-made policy which triggers the beginning period of coverage prior to the effective date. A retroactive date is not required. If one is shown on the policy, any claim made during the policy period on a loss that occurred before the retroactive date will not be covered.

Umbrella Liability Policy

A liability policy designed to provide liability protection above and beyond that provided by standard policies.

Valuable Papers and Records Insurance

Provides coverage for the replacement of valuable papers, records and forms, including electronic media

Virus Liability Endorsement

Provides coverage for the loss of data or replacement costs for hardware and software damaged by a computer virus; written as an added coverage on a Professional Liability policy. This endorsement also covers claims arising by unauthorized access to a system.

Worker's Compensation

Provides medical and disability coverage for on-the-job injuries or work related injuries; Also provides Employer's Liability coverage, protecting the company from an injured employee's claim that the employer's negligence was the cause of the employee's injury.

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