Popular Commercial Insurance Definitions

Knowing popular commercial insurance definitions can help you save big when comparing various quotes and rates.  According to Wikipedia: In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

commercial insurance definitions Listed below are some of the more popular commercial Insurance definitions and terms  all designed to help you better understand and simply the process of buying the correct commercial truck insurance or any other form of commercial insurance to protect you and your company from loss.

Commercial Insurance Definitions

Actual Cash Value (ACV) – Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old sofa will not be replaced at current full value because of a decade of depreciation. Understanding commercial insurance definitions and actual cash value will help you get the right policy for your needs.

Accidental Death Benefit – In a life insurance policy, benefit in addition to the death benefit paid to the beneficiary, should death occur due to an accident. There can be certain exclusions as well as time and age limits.

Actuary – A specialist in the mathematics of insurance who calculates rates, reserves, dividends and other statistics. (Americanism: In most other countries the individual is known as “mathematician.”)

Adjuster – A representative of the insurer who seeks to determine the extent of the insurer’s liability for loss when a claim is submitted.  Adjuster is a common commercial insurance definitions that you will need to know.

Aggregate Limit – Usually refers to liability insurance and indicates the amount of coverage that the insured has under the contract for a specific period of time, usually the contract period, no matter how many separate accidents might occur.

Annual Administrative Fee – Charge for expenses associated with administering a group employee benefit plan.

Automobile Liability Insurance – Coverage if an insured is legally liable for bodily injury or property damage caused by an automobile.

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

Blanket Property Coverage – Blanket insurance can provide coverage under a single limit for the following:
Two or more items (i.e. Building or Contents)
Two or more locations (i.e. Location A and/or location B)
A combination of items and/or locations

Builders Risk Coverage
This provides property insurance for buildings in the course of construction. Depending on the policy, this coverage can be for either the building’s value at the time of loss or its full value at the time of completion.

Business Interruption Insurance
This covers the loss of earnings as a result of damage or loss of business property. Reimbursement for salaries, taxes, rents, and other expenses plus net profits that would have been earned during the period of interruption can be included.

Commercial Crime Coverage
This covers money and securities, stock and fixtures against theft, burglary and robbery both on and off the insured premises and from both employees and outsiders.

Debris Removal Coverage
Covers the cost of removing debris after damage from fire or other covered peril that requires debris removal before reconstruction of the damaged building can begin.

Employee Benefit Plan Liability Coverage
Protects the insured employer against claims by employees or former employees resulting from negligent acts or omissions in the administration of the insured�s employee benefits programs.

Fidelity Bonds
This covers business owners for losses due to dishonest acts by their employees.

General Aggregate Limit
The total amount that will ever be paid by an insurance policy regardless of the number of claims made against it.

Loss Control
Inspection and engineering work done to help remove potential causes of loss. Loss control is also referred to as safety engineering, accident prevention, accident control, or loss prevention.

Named Perils Insurance
An insurance policy which covers only defined perils or causes of loss. This is the opposite of an All-Risk policy, which covers all perils except those specifically excluded.

Pollution Cleanup and Removal Coverage
This is an aggregate first party coverage that applies to your expense in extracting �pollutants� from land or water at your location, if the release of the pollutants is caused by or results from a covered loss.

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.

Replacement Cost Coverage
This form of insurance provides coverage on the basis of full replacement cost without deduction for depreciation on any loss sustained, subject to terms of the co-insurance clause. This coverage applies to both building and contents items as specified on the face of the policy.

Surplus Lines Tax
A tax paid by the insured on insurance placed with surplus lines carriers. It is collected by the agent and paid to the state.

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.

As you can see, this is only a partial list of the most important commercial insurance definitions and terms.  Be sure to frequently visit this page as we are constantly updating these terms.

Commercial Insurance Definitions & Articles:

Be sure to visit Commercial Insurance Source to find the latest news, information & tips all designed to help you understand the latest commercial insurance definitions and jargon.

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