Insurance Policy Glossary
Actual Cash Value A kind of property insurance that only reimburses the insured for the depreciated, or market, value of items. It is generally not a good deal for businesses because it usually does not cover the full costs of replacing lost or destroyed items.
A standard property insurance policy that covers losses caused by common perils such as fire, theft, and some kinds of weather damage. Most at-risk policies specifically exclude losses from certain events such as floods.
Business Vehicle Insurance
Another term for commercial vehicle insurance.
Usually a large property loss caused by a rare event such as a natural disaster or a terrorist attack. Catastrophic losses are not covered by most business insurance policies but rather by special policies or riders with high limits and large deductibles.
The amount of loss a business has to cover with its own funds before insurance coverage starts. The amount of the deductible can raise or lower the cost of an insurance policy. This information will always be included in the business insurance quote.
The loss of value over time that affects most items. The amount paid on property losses in cash value insurance policies can be limited by depreciation.
Provides an income to someone who is incapable of working. Unlike workers compensation, disability insurance provides income to employees who have been disabled by illness or injury unrelated to their work.
Types of losses that are deliberately not covered by an insurance policy. Generally, losses caused by catastrophes and very risky activities are treated as exclusions in business insurance policies.
A kind of liability insurance that protects a business from claims arising from the actions of its employees.
An agreement not to hold a specific party liable for certain kinds of damages. An indemnification agreement is often signed when somebody is hired to perform an inherently dangerous activity such as testing a new drug. Indemnification agreements are designed to eliminate liability issues in certain fields.
Occurs when a court rules that an individual or business is responsible for losses or debts. Generally, liability means that an individual or business can be sued to recover losses.
The maximum amount of money that can be paid out in an insurance policy. Many policies carry limits on the total amount of money and the number of claims that can be paid in a year.
A kind of liability insurance that protects doctors and other medical practitioners from lawsuits filed over their actions.
A legal concept in which a person or business deliberately refused to take reasonable actions that could have prevented or mitigated a loss. A business owner who refused to pick up a banana peel that caused a slip-and-fall injury would be considered negligent.
Property insurance that only reimburses losses caused by a specific kind of peril, such as a flood. It usually covers losses specifically excluded from property insurance policies.
The regular payment required to maintain an insurance policy. It can be paid on a monthly, yearly, or quarterly basis. The premium is determined by risk, the deductible, and the amount of insurance purchased. This information will always be included in the business insurance quote.
Professional Liability Insurance
A policy that covers claims arising from the business activities of a professional such as an accountant. It is similar to malpractice insurance but not as comprehensive.
A kind of property insurance that pays the full cost of replacing lost or destroyed goods. It is generally a much better deal for businesses because it covers all the costs associated with replacing damaged or lost items.
A clause in an insurance policy that provides additional insurance to cover losses not covered by the normal policy. A typical rider to an insurance policy would be flood or earthquake insurance.
In insurance, the likelihood that a loss will occur. The amount of risk is the basis of the cost of insurance policies: The greater the risk, the higher the cost of the policy.
An outdated term for workers compensation.
Business Insurance Directory