Commercial insurance glossary

An insurance company licensed by a state’s insurance department to sell policies in that state. Admitted carriers file their rates and forms with the regulator, and their policyholders are protected by the state’s guarantee fund if the carrier becomes insolvent. Most standard business insurance is written by admitted carriers.

The segment of the insurance market that covers risks standard (admitted) carriers decline — unusual operations, tough claim histories, or hard-to-price exposures. E&S carriers are “non-admitted”: they have more freedom in pricing and policy wording, and their policies sit outside state guarantee funds.

An insurer not licensed in the policyholder’s state but permitted to write hard-to-place risks there through the surplus lines market. Non-admitted carriers do not file rates with the state and are not backed by the state guarantee fund, which is why they are reserved for risks the admitted market declines.

A carrier’s decision not to offer a new policy term when the current one expires. It is not a cancellation: coverage continues until the expiration date. Non-renewal means the account no longer fits that carrier’s appetite — it does not mean the business is uninsurable elsewhere.

Termination of an insurance policy before its expiration date, by either the carrier or the insured. Mid-term cancellation by a carrier is far more restricted than non-renewal and generally requires specific grounds, such as non-payment of premium, with advance written notice to the insured.

The official claim history report for a business, produced by each insurance carrier that has covered it — listing every claim, its status, and amounts paid or reserved. Underwriters require loss runs (typically five years) before quoting, making them the single most important document in any insurance submission.

The date a current insurance policy expires — shorthand brokers use for the renewal deadline that drives every quoting timeline. Marketing a risk effectively takes several weeks before the x-date, which is why brokers ask for it first and why starting early matters most for difficult accounts.

The kinds of risk an insurance carrier wants to write — defined by industry, size, location, loss history, and operations. Appetite shifts with market cycles: a class of business a carrier welcomed three years ago may be declined today, which is a common reason healthy businesses get non-renewed.

The package a broker sends underwriters to obtain quotes: completed applications, loss runs, operation details, payroll and revenue figures, and a narrative explaining the risk. A complete, honest submission materially changes outcomes — underwriters price uncertainty against the insured, and gaps read as uncertainty.

Coverage for injury claims arising from fights, altercations, or physical security incidents at a business — most relevant to bars and venues. Many liability policies exclude assault and battery entirely or cap it with a low sublimit, so the A&B wording is often the most important line in a bar’s policy.

A lower limit inside an insurance policy that applies to a specific type of claim, overriding the policy’s headline limit. A policy advertising $1 million in liability coverage may pay only $25,000 for an assault & battery claim if a sublimit applies — which is why sublimits deserve more attention than limits.

Coverage for claims alleging a business that sells or serves alcohol contributed to an injury — for example, claims connected to serving an intoxicated patron. Standard general liability policies typically exclude liquor liability for businesses in the alcohol business, so bars and restaurants buy it as separate or added coverage.

The legal doctrine under which a business serving alcohol can be held responsible for harm caused by an intoxicated patron. Each state defines its own version by statute, and the scope varies widely — which is why liquor liability coverage and state law need to be read together.

Liability coverage for claims alleging abuse or molestation — and frequently, alleging the organization’s negligent hiring or supervision of the person accused. It is essential for organizations serving vulnerable people: group homes, daycares, behavioral health programs. Standard liability policies commonly exclude it or attach restrictive sublimits.

A policy that covers claims made (reported) during the policy period, regardless of when the incident occurred — subject to a retroactive date. Common for professional liability and abuse & molestation coverage. Switching claims-made policies requires care: gaps in continuous coverage can leave past work uninsured.

A policy that covers incidents that happen during the policy period, no matter when the claim is eventually filed — even years later. Most general liability is written this way. The distinction from claims-made matters most for slow-emerging claims, such as injuries or abuse allegations reported long after the event.

In a claims-made policy, the earliest incident date the policy will cover. Claims arising from events before the retroactive date are excluded even if reported during the policy period. Preserving the original retroactive date when changing carriers is critical — resetting it erases coverage for everything before it.

The foundational business policy covering third-party bodily injury, property damage, and related claims arising from operations and premises. It does not cover employee injuries (workers’ compensation), autos, or professional errors — and for specialized trades, generic GL forms often exclude the work’s core hazards via endorsement.

Mandatory coverage paying medical costs and lost wages for employees injured on the job, in exchange for which employees generally cannot sue the employer. Premiums are driven by payroll, classification codes, and the employer’s experience modifier — and for high-hazard trades it is usually the hardest line to place.

The numeric code workers’ compensation systems use to group employees by the hazard of their work, setting the base rate per $100 of payroll. Misclassification cuts both ways: it can inflate premium or trigger painful audit bills, so verifying class codes is a standard part of any renewal review.

A multiplier applied to a business’s workers’ compensation premium comparing its actual claim history to others in its class. A 1.0 mod is average; below 1.0 earns a credit, above 1.0 a surcharge. The mod follows the business across carriers, making claim prevention a durable pricing asset.

Despite the name, coverage for movable business property — tools, machinery, and equipment that travel between job sites. For contractors it is the policy that covers chippers, stump grinders, and cranes wherever they are, filling the gap left by property policies that cover equipment only at a fixed location.

Equipment listed individually on a policy, each item with its own description and insured value. Scheduling gives certainty that a specific machine is covered, but only listed items are protected — newly purchased or rented equipment is not covered until added, which is the most common equipment claim gap.

A one-page document summarizing a business’s active coverage — carriers, policy numbers, limits, and dates — issued as proof of insurance for clients, landlords, and municipalities. A certificate is evidence, not coverage: it confers no rights by itself, and the policy’s actual wording always controls.

A person or business added to someone else’s liability policy — typically a client, landlord, or municipality requiring protection from claims arising out of the policyholder’s work. Contracts routinely require additional insured status; the endorsement’s exact wording determines how much protection the added party actually receives.

A written amendment that changes a policy’s terms — adding coverage, removing it, or modifying conditions. Exclusionary endorsements deserve the closest reading: a policy’s declarations page can look generous while an endorsement quietly removes the coverage that matters most to that business’s actual operations.

The end-of-term review where a carrier compares the payroll or revenue actually recorded against the estimates the premium was based on, then bills or refunds the difference. Underestimating exposures at binding does not save money — it defers the cost into an audit bill, often at a worse moment.

A period, even one day, in which a business had no active insurance. Lapses make placement harder and more expensive: many carriers surcharge or decline applicants with recent lapses, and any incident during the gap is simply uninsured. Avoiding a lapse is the first priority after any non-renewal.

A phase of the insurance cycle marked by rising premiums, shrinking carrier appetite, and stricter underwriting — the opposite of a soft market. In hard markets, even well-run businesses see non-renewals and steep increases, and specialty or surplus lines markets absorb more of the risks standard carriers shed.

A policy adding limits above a business’s underlying liability policies, responding after those limits exhaust. Umbrella forms can be broader than the underlying policies; excess forms typically follow them. For contracts requiring $2 million or more in liability limits, this is usually how the requirement is met.

An intermediary with access to surplus lines and specialty carriers that retail brokers cannot reach directly. For hard-to-place risks, a retail broker presents the account to wholesale markets to find terms. The structure adds a step, but it is how difficult accounts reach the carriers built to write them.

A temporary written confirmation that coverage is in force, issued before the full policy documents arrive. Binders bridge the gap between agreeing to terms and policy issuance. Until a binder or policy exists, there is no coverage — verbal assurances and pending applications do not protect anything.

Both make the insured bear the first dollars of a loss, but differently: with a deductible, the carrier pays the claim and collects the deductible back; with a self-insured retention, the insured must pay out of pocket first before the policy responds at all — including, often, legal defense costs.

Policy language removing specific causes, activities, or claim types from coverage. Exclusions define a policy’s real shape more than its limits do. For specialty businesses, the critical question at every renewal is which exclusions apply to the operations that generate most of the revenue — and what fills those gaps.