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Business Insurance Glossary

Illustration of a Business Insurance Glossary


Assessed Value

The value of commercial property as determined by city hall or a municipal assessor.

Blanket Insurance

An insurance policy that allows a business owner to insure one property type at multiple locations or multiple property types at the same location under the same policy.

Business Insurance

A policy that covers business losses due and accidents related to property damage, legal liability, and employee-related risks.

Business Interruption Insurance

A rider on a business insurance policy that provides additional coverage when your property loss or damage forces your business to cease normal operations. Depending on the coverage, business interruption insurance could cover loan payments, taxes, rent, and other related expenses.

Business Owner’s Policy

An insurance plan that bundles together property insurance and general liability insurance together for small business owners.

Cyber Extortion

An Internet crime when a hacker threatens your business unless you pay a ransom.

Cyber Liability Insurance

Liability coverage for businesses that are victims of a computer hack or data breach.

Debris Removal

A clause added to a policy in which the company assumes liability for the removal and disposal of debris caused from damages made to the property covered by the insurance plan.

Demolition Clause

A clause added to an insurance policy that protects against loss from laws or ordinances that regulate construction or repair.

Digital Assets

Digitally stored content owned by a business. This could be a hard drive, flash drive, the cloud, or other forms of data storage.

Directors and Officers Liability Insurance (“D & O”)

Insurance coverage that protects the company’s financial assets from legal settlements and the cost of legal defense in the event an officer or director of the company is accused of negligent or wrongful acts.

Employer’s Liability Insurance

An insurance plan built for small business owners that protects them from lawsuits over workplace injuries.

Employment Practices Liability Insurance

Coverage that assists businesses paying the legal fees, settlements, and judgments if an employee files a lawsuit against the business for discrimination and/or civil rights violations as interpreted by the Equal Employment Opportunity Commission.

Errors and Omissions Insurance (“E & O”)

A form of liability insurance that protects a business in the event of a professional oversight, error, or act of negligence.


A contractor or employee of a business that is entrusted with the company’s benefit funds.

Fidelity Bonds

A form of insurance coverage that protects an employer from the dishonest acts of their employee.

General Liability Insurance

A basic business insurance plan that protects you from the most common property damage, bodily harm, and personal injury claim.

Gross Earnings

Total revenue earned from operating sources before deducting taxes and expenses.

Inland Marine Insurance

Insurance coverage that protects any business tools and equipment in transit.

Key Person Insurance

A business life insurance policy that covers a particular person within the company. It issues benefits to help offset the loss of the person in question and help find their replacement.

Loss Control

A tool used in risk management that helps reduce the amount of loss experienced by a company.

Marine Insurance

A type of insurance coverage that helps cover damages or loss to company equipment or goods in transport. Some plans can also include liability coverage for third parties.

Market Conduct Examination

A study of the business practices and operations of an insurer and its agents.


Occupational Safety and Health Act which enforces standards and laws for acceptable working conditions in industrial and/or commercial businesses.


Refers to any person that assists in the production of a business, usually sales and manufacturing.

Product Liability Insurance

A policy that protects against liability stemming from the handling or use of goods or products manufactured, sold, handled, or distributed by the insured, provided that the accident occurs after the insured has released possession of the product(s) to others and are away from the insured’s premises. This policy also offers protection in case of accidents caused by faulty workmanship under similar conditions.

Professional Liability Insurance

A form of liability coverage specifically tailored to cover professional errors or omissions.

Reciprocal or Interinsurance Exchange

An unincorporated group of firms, corporations, or individuals who mutually agree to exchange contracts of insurance policies and share their insurance risks among themselves.

Small Business Insurance

A type of insurance policy that provides risk protection for small business owners, freelancers, and independent contractors.

Surety Bonds

A three-party bond that guarantees that the principal will fulfill the obligations set by the obligee or else the surety will go into effect to help the obligee recover their losses.

Umbrella Insurance

Additional liability coverage that helps a business or firm settle claims or cover the cost of court judgments in the event of a lawsuit. Typically sold in $1 million increments.

Underlying Limits

The limits of liability underneath an umbrella insurance policy.

Unfair Trade Practices

Acts that are considered unfair methods of competition or deceptive practices. Such acts include twisting, rebating, misrepresentation, inequitable claim settlement, unfair discrimination, and false advertising.

Use and Occupancy Insurance

Coverage that protects against loss caused by a fire or other contingencies insured against, including loss of net profits, fixed charges, and expenses that would have been acquired if business operations were not disrupted.

Worker’s Compensation Insurance

Insurance coverage that helps businesses pay for medical expenses in the event an employee is a victim of a work-related illness or injury.