Insurance glossary

Additional insured

A person or business added to your policy, usually a client or general contractor, so they are covered for claims arising from your work for them.

Aggregate limit

The most a policy will pay for all covered claims during the policy period.

Audit

A review at the end of the policy term of actual payroll, sales or subcontractor costs, used to adjust the final premium.

Binder

A temporary document showing coverage is in force until the policy is issued.

Builder's risk

Insurance for a building or structure while it is under construction or renovation.

Certificate holder

The person or business a certificate of insurance is issued to, such as a client or general contractor.

Certificate of insurance

A one-page summary of the policies you carry, their limits and their dates, used as proof of coverage.

Claims-made

A policy that covers claims first made during the policy period, as opposed to occurrence coverage.

Class code

A code that describes the type of work a business does, used to set rates for workers' compensation and general liability.

Completed operations

Coverage for claims that arise after a job is finished and are traced back to your work.

Declarations page

The first page of a policy, listing the insured, the coverage, the limits, the premium and the policy period.

Deductible

The amount you pay on a claim before the insurance pays.

Endorsement

A change to a policy that adds, removes or alters coverage.

Excess liability

Coverage above an underlying policy's limits that follows that policy's terms.

Exclusion

Something a policy does not cover.

Experience modification factor

A number that adjusts a business's workers' compensation premium based on its own claims history. Also called the mod.

Hired and non-owned auto

Liability coverage for rented vehicles and for employees' personal vehicles used for business.

Inland marine

Coverage for property that moves, such as tools and equipment, and property in transit.

Named insured

The person or business the policy is issued to.

Occurrence

An accident, including continuous or repeated exposure, that results in injury or damage. Occurrence policies cover incidents that happen during the policy period.

Per-project aggregate

An endorsement that gives each project its own aggregate limit.

Premium

The price of an insurance policy.

Primary and noncontributory

A requirement that your policy pays first and does not seek contribution from the client's insurance.

Producer

A licensed insurance agent or broker.

Renewal

The continuation of a policy for a new term.

Subrogation

An insurer's right to recover what it paid on a claim from the party responsible for the loss.

Surplus lines

Coverage placed with insurers not licensed in a state, used for risks standard insurers decline.

Umbrella

A policy that adds liability limits above general liability, auto and employer's liability.

Waiver of subrogation

An agreement that your insurer will not seek recovery from a specific party, often the client, after paying a claim.

X-date

The expiration date of a current policy, when it is up for renewal.