Commercial Insurance Glossary

A person or organization added to someone else's insurance policy who receives coverage under that policy. Commonly required by contracts — a landlord requiring a tenant to add them as an additional insured to the tenant's GL policy.

An insurance company licensed and regulated by the state insurance department. Admitted policies are backed by the state guaranty fund if the insurer becomes insolvent. Contrast with Non-Admitted.

The maximum amount an insurance policy will pay for all covered claims during the policy period, regardless of how many claims occur. For example, a $2M aggregate means the insurer pays no more than $2M total in a policy year.

A number on a commercial auto policy that defines which vehicles are covered. Symbol 1 = any auto; Symbol 7 = scheduled autos only; Symbol 8 = hired autos; Symbol 9 = non-owned autos. Most policies combine symbols.

Property coverage that applies a single limit across multiple locations or items rather than scheduling each one separately. Provides flexibility when values shift between locations.

A package policy that combines General Liability and Commercial Property into one policy, typically at a lower combined premium than buying each separately. Available to smaller businesses that meet eligibility criteria.

A document that summarizes a business's insurance coverage — carrier, policy numbers, limits, and effective dates. It proves coverage exists but does not grant additional rights or modify the policy.

A policy that covers claims made during the policy period, regardless of when the incident occurred (subject to a retroactive date). Used for professional liability, D&O, E&O, and cyber. Contrast with Occurrence policy.

A numeric code assigned by rating bureaus (NCCI, ISO) that classifies a business by its type of operations. Used to determine base rates for GL and workers comp. Example: 91340 = Retail stores, not otherwise classified.

A property insurance requirement that the insured carry coverage equal to a specified percentage (usually 80-90%) of the property's replacement cost value. Carrying less results in a penalty on claims.

GL coverage for bodily injury or property damage that occurs after a contractor's work is completed. Separate aggregate from premises/operations. Critical for contractors — many claims arise after the job is done.

A customizable commercial insurance package that combines multiple coverage parts (property, GL, crime, inland marine, etc.) into one policy. More flexible than a BOP but typically for larger or more complex accounts.

Liability coverage protecting the personal assets of directors and officers from claims alleging wrongful management decisions. Covers shareholder suits, regulatory actions, and employee claims against leadership.

The front page of an insurance policy that summarizes the key information: named insured, policy period, coverages, limits, deductibles, and premium. Also called the "dec page."

The amount the insured pays out-of-pocket before insurance coverage kicks in. Higher deductibles lower premiums. In commercial lines, deductibles can be per-occurrence or aggregate.

Professional liability insurance that covers claims arising from mistakes, negligent advice, or failure to perform professional services. Used by agents, consultants, IT firms, accountants, and other professionals.

A written amendment that modifies the terms of an insurance policy. Endorsements can add, remove, or change coverage. Also called a "rider" on some policy forms.

Non-admitted insurers that can write risks that standard admitted markets decline. E&S carriers have more pricing and form flexibility. Used for hard-to-place, high-hazard, or unusual risks.

A multiplier applied to workers comp premium that reflects a company's actual loss history compared to average businesses in the same industry. An EMR above 1.0 indicates worse-than-average claims history.

A 9-digit tax ID number assigned by the IRS to businesses. Required on most commercial insurance applications as a unique identifier.

Coverage for auto repair shops, dealerships, and parking facilities for damage to customer vehicles while in their care, custody, or control. Fills the gap left by standard GL.

Coverage for third-party bodily injury, property damage, personal injury, and advertising injury claims arising from business operations. The foundational commercial coverage for nearly every business.

Federal law requiring financial institutions — including insurance agencies — to protect the security and confidentiality of nonpublic personal information (NPI) of their customers.

A market cycle characterized by higher premiums, stricter underwriting, reduced capacity, and more coverage restrictions. Caused by elevated losses, catastrophes, or reduced competition.

Coverage for vehicles the insured rents, borrows, or employees use personally for business. Added to a commercial auto or GL policy. Critical for businesses whose employees drive personal cars on company business.

An organization that develops standard policy forms, rating manuals, and statistical data used across the insurance industry. Most commercial policies are based on ISO forms or derived from them.

The termination of an insurance policy due to non-payment of premium. Coverage gaps (lapses) are underwriting red flags, especially for professional liability and workers comp.

A report from a prior carrier showing a business's claim history — dates, types, and amounts paid for each claim over a specified period. Usually 3-5 years required for commercial submissions.

A federally mandated endorsement on commercial auto policies for motor carriers engaged in interstate commerce. Guarantees minimum liability limits required by the FMCSA.

An insurance policy covering only one line of coverage, as opposed to a package or BOP that combines multiple coverages. GL written alone without property is a monoline GL policy.

The person or entity specifically identified in the policy declarations as the insured. The named insured has the broadest rights under the policy, including cancellation rights and premium obligations.

The organization that develops workers comp class codes, rating plans, and experience modification factors for most U.S. states. Provides the statistical foundation for WC pricing.

An insurance company not licensed in a state but permitted to write coverage through the surplus lines market. Not backed by the state guaranty fund. See E&S Market.

Personal financial information collected by financial institutions including insurance agencies — SSNs, financial data, health information. Protected under GLBA and state privacy laws.

A policy that covers incidents that occur during the policy period, regardless of when the claim is made. GL policies are typically written on an occurrence basis. Contrast with Claims-Made.

The maximum an insurer will pay for a single covered event or claim. GL policies typically show per-occurrence and aggregate limits (e.g., $1M per occurrence / $2M aggregate).

A review at the end of a policy period where the insurer verifies actual exposure (payroll, revenue, vehicle count) vs. estimated amounts used at inception. Results in additional or return premium.

Coverage under a claims-made policy for incidents that occurred before the policy's retroactive date. Available through extended reporting periods or tail coverage.

The cost to replace or rebuild property at current prices without deduction for depreciation. Required by most property coinsurance clauses. Contrast with Actual Cash Value (ACV).

The earliest date for which a claims-made policy will cover incidents. Claims arising from incidents before the retroactive date are excluded.

A list of all business locations attached to a commercial property or GL policy, with individual limits or values for each. Required when coverage applies to multiple addresses.

A market cycle with lower premiums, relaxed underwriting standards, and broader coverage availability. Caused by profitability, surplus capacity, and competition among carriers.

The right of an insurer to pursue a third party that caused an insurance loss. A Waiver of Subrogation endorsement prevents the insurer from seeking recovery against a specified party.

Coverage placed with non-admitted carriers through licensed surplus lines brokers. Used for risks standard markets won't write. Typically not subject to state rate and form filings.

An extended reporting period endorsement on a claims-made policy that allows claims to be reported after the policy expires for incidents that occurred during the policy period. Also called an ERP.

A policy providing excess liability limits above primary GL, commercial auto, and employers liability policies. Broader than excess — often covers some gaps in underlying policies.

The process by which an insurer evaluates a risk, determines whether to provide coverage, and sets the premium. Underwriters review applications, loss runs, and risk characteristics to make these decisions.

An endorsement that prevents the insurer from pursuing recovery against a specified third party after paying a claim. Commonly required in contracts — landlords, general contractors, and municipalities frequently require it.

State-mandated coverage for employees injured on the job. Pays medical expenses and lost wages regardless of fault. Rated on payroll by class code. Required in almost every state for employers with employees.

Industry term for issuing an insurance policy. "Who writes trucking?" means which carriers offer trucking coverage. "We can't write this risk" means the carrier is declining.