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Policy

Easy-to-understand definitions for terms often found in commercial insurance policies

Terms

Floater Policy

A Floater Policy may refer to an insurance policy that provides coverage for the movement of goods from one location to another. This type of policy is typically used for...

Inception Date

The inception date of an insurance policy is the date on which the insurance coverage for that particular policy begins. It marks the start of the policy period during which...

Name of Insured

Name of Insured is a term used in the insurance industry to refer to the individual or entity that has an insurance policy in their name. The name of insured...

Occurrence

Occurrence is a term that may refer to a specific event, happening, or circumstance. It can be used to refer to an event that has already taken place or an...

Principles of Indemnity

The term Principles of Indemnity may refer to the underlying principles of insurance contracts that seek to restore an insured individual or company to the same financial position they were...

Guaranteed Renewable Policy

A Guaranteed Renewable Policy is a type of insurance policy that guarantees the policyholder the right to renew the policy at the end of the policy term, without any change...

Business Activities

Business Activities is a term that may refer to any of the processes, operations, and services that a business performs to generate income and value for its customers, stakeholders, and...

Grace Period

A Grace Period is a period of time that may refer to a type of insurance policy in which a premium payment is made late or skipped, but coverage remains...

Coinsurance Provision

Coinsurance Provision is a term that may refer to a specific clause in a health insurance policy that requires the policyholder to pay a portion of their medical bills out...

Threshold Level

The term Threshold Level may refer to a specific limit or point that must be met or exceeded in order for something to occur. In terms of insurance, threshold level...

Expiry Date

The expiry date, or expiration date, on an insurance policy is the date on which the policy coverage ends. Effectively, it is the date until which the insurance company is...

Loss Report

A loss report, also known as a loss run report, is a document that summarizes an insured's claims history for a specific period of time. It is typically used by...

Insurance Limit

An insurance limit is the maximum amount that an insurer will pay for a covered claim. An insurance limit can be given "per occurrence" (i.e. for a single incident) or...

Total Insurable Value

Often shortened to TIV; this is the sum of all property in one's care, custody, or control.

Package Policy

A Package Policy is a policy that offers coverage for multiple lines of business. For example, if a policy lists General Liability, Property, and Umbrella coverage on their form, then...

Period of the Policy

A policy period, or effective dates, is the time that a policy is active and available for an insured to utilize. For example, if we were to see a 01/01/2024-25...

Ownership Clause

Ownership Clause is a legal term that is used in a variety of insurance policies and agreements. It is a clause that outlines the rights and responsibilities of the policy...

Optionally Renewable

Optionally Renewable may refer to a type of insurance policy which allows the policyholder to choose whether or not to renew their policy at the end of the term. This...

First Named Insured

The term First Named Insured may refer to an individual or entity that is explicitly identified as the primary policyholder on an insurance policy document. This individual or entity is...

MCS-90 Endorsement

The MCS-90 Endorsement is a specific type of insurance endorsement that provides additional coverage on motor carriers’ liability policies. This endorsement is required by the Federal Motor Carrier Safety Administration...

Fixed Period Option

Fixed Period Option may refer to a type of insurance coverage that provides protection for a pre-determined period of time. Fixed Period Option is also known as Fixed Term Insurance...

Commercial Insurance Endorsements

Commercial Insurance Endorsements may refer to documents that are added to a commercial insurance policy to modify or extend the coverage provided by the policy. Endorsements can also be used...

Preventative Shutdown Endorsement

The Preventative Shutdown Endorsement (PSE) may refer to an insurance policy provision that provides coverage for business interruption losses caused by the preventative or precautionary shutdown of a business. The...

Actual Cash Value

Actual Cash Value (ACV) may refer to the fair market value of an item or property that has been lost, destroyed, or damaged. This fair market value includes depreciation and...

Speculative Risks

Speculative Risks may refer to risks that are taken with the potential for either profit or loss. In practical terms, these are risks that are taken with the intent of...

Anti-Stacking Provisions (Endorsement)

Anti-Stacking Provisions (Endorsement) definition may refer to a provision in an insurance policy that limits the amount of coverage that a policyholder can receive from multiple policies. This provision is...

Additional Insured

Additional Insured is a term that may refer to an individual or entity that is insured under an insurance policy in addition to another insured. This means that the additional...

Policy Limit

Policy Limit may refer to the maximum amount of coverage provided under an insurance policy. This amount is typically determined by the insurance company at the time of issuance and...

Anti-Stacking Provisions (Endorsement)

Anti-Stacking Provisions (Endorsement) definition may refer to a provision in an insurance policy that limits the amount of coverage that a policyholder can receive from multiple policies. This provision is...

First Dollar Defense

First Dollar Defense, also known as primary insurance, may refer to an insurance policy that pays out on the first dollar of a covered claim. This type of policy eliminates...

Auto Coverage Symbols

Auto Coverage Symbols may refer to the codes used to indicate the types of coverage included in an auto insurance policy. These symbols are used to identify the types of...

Retention

Retention may refer to a variety of insurance-related concepts, but in the context of Directors & Officers (D&O) insurance, it simply means the amount of risk that the policyholder agrees...

Insurer

An "insurer" is a foundational term within the domain of insurance. By definition, an "insurer" is an entity, often a company, that provides insurance coverage. This entity assumes the risk...

Insured

The term Insured may refer to an individual or organization who is covered by an insurance policy. In order to be considered an Insured, the individual or organization must have...

Deductible

A Deductible is a term that may refer to the amount of money a policyholder must pay out of pocket before their insurance coverage kicks in. The deductible is an...

Unladen Liability

Unladen liability, in the realm of commercial insurance, refers to the legal responsibility or potential financial loss faced by a business or individual for accidents or damages that occur while...

Nonforfeiture

Nonforfeiture, in the realm of commercial insurance, refers to a provision that ensures policyholders retain certain benefits or values even if they decide to terminate or surrender their insurance policy...

Short Rate Cancellation

Short rate cancellation, in the realm of commercial insurance, refers to a provision that allows an insurance company to charge a penalty when a policyholder cancels their insurance policy before...

Subjectivities

Subjectivities, in the realm of commercial insurance, refer to the aspects of an insurance policy that are open to interpretation or judgment. They are the factors or criteria that can...

Primary and Noncontributory

Primary and noncontributory, in insurance terminology, is a clause typically found in liability insurance policies. It’s an agreement between two insurance policies where one policy is designated as the primary...

Automatic Premium Loan

An automatic premium loan (APL) is a provision found in certain insurance policies. It allows the insurer to automatically borrow money from the policy's value to pay outstanding premium payments....

Tertiary Beneficiary

A tertiary beneficiary, in the realm of commercial insurance, refers to an individual or entity named in an insurance policy as the third level of priority to receive the policy...

Easement Appurtenant

An easement appurtenant, in the realm of commercial insurance, refers to a legal right that grants a property owner the privilege to use a specific portion of another person's property...

Liberalization Clause

A liberalization clause is an insurance policy provision that provides additional coverage or benefits to the policyholder without requiring additional premium payments. It is designed to protect policyholders against changes...

Supplementary Payments

Supplementary payments in insurance refer to additional financial provisions made by an insurance company to the policyholder beyond the basic coverage. These payments are typically made to cover certain expenses...

Fixed Amount Option

Fixed amount option refers to a type of life insurance that allows the policyholder to choose a fixed amount of coverage at the time of policy purchase. This option allows...

Exposure

Exposure, in the realm of commercial insurance, refers to the level of risk or vulnerability that a business or individual faces regarding potential losses or damages. It represents the extent...

Other Insurance Clause

An “other insurance clause” is a provision in an insurance policy that addresses how coverage will apply if the insured party has multiple insurance policies covering the same type of...

Flat Cancellation

Flat cancellation is a term describing the complete termination of an insurance policy on the effective or renewal date. In other words, the policy is canceled before coverage begins or...

TIV Insurance

TIV insurance is an acronym that stands for Total Insured Value insurance. The term refers to a type of insurance policy that covers the full value of the insured property,...

Corridor Deductible

A corridor deductible is a type of insurance deductible that is commonly used in health insurance policies but is becoming more popular in property and casualty insurance. The term refers...

Products Completed Operations

Products completed operations, within the realm of insurance, refers to a specific coverage term that may refer to the liability risks associated with products and completed work. It is a...

Intrastate Commerce

Intrastate commerce refers to the commercial activities and transactions that take place exclusively within the boundaries of a single state or jurisdiction. It is a term used to describe the...

Renewal Policy

A renewal policy, a crucial aspect of insurance management, refers to the continuation of an existing insurance policy for a subsequent policy term. The definition of a renewal policy encompasses...

Pro Rata Cancellation

Pro rata cancellation, a term commonly used in the insurance industry, refers to the termination of an insurance policy before its expiration date, where the insurer returns the unearned premium...

Attachment Point

Attachment point is a term commonly used in the insurance industry to refer to the threshold at which an insurance policy begins to provide coverage for a loss. The attachment...

Tort

Tort is a term used in insurance to refer to a legal concept involving a wrongful act or omission by one party that causes harm or injury to another party....

Incontestable Clause

The incontestable clause in an insurance policy states that the insurance company cannot contest or challenge the policy's validity after it has been in effect for a certain period. It...

Consequential Loss

Consequential loss may refer to economic loss caused by damage to property or other losses suffered due to a breach of contract. Consequential loss is typically defined as "losses which...

Entire Contract Clause

The entire contract clause, also known as an "entire agreement clause," is a type of clause found in many contracts and legal documents. It is a provision that states that...

Guaranteed Renewable

Guaranteed renewable is a term that may refer to an insurance policy that guarantees the policyholder the right to renew their policy for a given period. This type of policy...

Unearned Premium

Unearned premium may refer to an insurance term that describes the portion of a policyholder's premium paid in advance for coverage that has not yet been used. When a policyholder...

Gross Written Premium

Gross written premium is a term that may refer to the total amount of premiums collected by an insurance company during a given period before any discounts or refunds are...

Earned Premium

Earned premium is a technical term used in the insurance industry that may refer to the portion of a premium that an insurance company has earned. It is the amount...

Aggregate Limit of Liability

Aggregate limit of liability is a term used in the insurance industry that may refer to a policy provision that limits the total amount an insurance company must pay during...

Insurable Interest

Insurable interest may refer to a legal concept that defines the relationship between an individual and the property they are insuring. It is the legal right of an individual to...

Commercial Insurance Endorsement

A commercial insurance endorsement is known as a rider or clause and enables companies to change while offering protection. It’s an attached document that becomes part of an insurance policy,...

General Aggregate Limit

The general aggregate limit may refer to an insurance limit, the maximum amount of coverage an insurance provider will pay in the event of multiple claims during a policy period....