Business Insurance Terms

Outlined below are common terms used to describe the different facets of business insurance.

Actual Cash Value

Reimbursement for the actual amount minus depreciation of property that needs to be repaired or replaced.

Blanket Insurance

Covers more than one kind of property in one location or similar properties at numerous locations.

Business Income (Interruption) Insurance

Reimbursement for lost gross income and continuing expenses for a set period of time that occurred because of a stop in normal business operations.

Business Owner's Policy (BOP)

Package policy that couples general liability, property and business income coverage, et al, in one policy.

Co-Insurance

Requires the insured to hold insurance that is equal to a set percentage of your property's value in order to receive full payment for a loss, minus the deductible. You may suffer a penalty for underinsurance if you do not comply with these requirements.

Deductible

A predetermined amount or percentage that you must pay before the insurance company will cover any losses.

Endorsement

A rider that amends that policy's original terms.

Exclusion

States what will not be covered in the event of a claim.

Liability Insurance

Protection for bodily injury or property damage claims from a third party for which the insured is held liable.

Named-Peril Policy

Covers only losses that have been caused by incidents that have been specifically named in your policy.

Peril

An incident that results in a loss.

Professional Liability Insurance

Protection against claims that were a result of negligence, omissions errors, or financial damages to a client.

Replacement Cost

Reimbursement for the actual amount property that needs to be repaired or replaced.

Special (Open) Peril Policy

Covers losses that have resulted from an incident that is not a named-peril.

Umbrella Insurance

Protection for losses that exceed the limit of a typical policy.