Published June 10, 2026 · Last updated June 10, 2026
Commercial insurance glossary, in plain English
The terms that decide real outcomes for the businesses we work with — each defined so it can stand alone. General information, not advice; your policy's own definitions govern your coverage.
Additional insured
A person or business added to your policy by endorsement so your coverage also protects them for liability arising from your work — routinely required by contracts, landlords, and municipalities before a job starts.
Admitted carrier
An insurer licensed by the state where the policy is sold, using state-reviewed rates and forms, and backed by the state guaranty fund if the insurer fails. Contrast with surplus lines.
Aggregate limit
The maximum a policy will pay for all claims combined during the policy period, as opposed to the per-occurrence limit that caps any single claim.
Assault & battery (A&B) sublimit
A cap on what a policy pays for claims arising from fights and physical altercations — often a fraction of the headline limit. For bars and nightlife venues, this number is frequently the real policy limit.
Abuse & molestation (A&M) coverage
Coverage for claims alleging abuse of someone in an organization’s care, including allegations of negligent hiring or supervision. The defining coverage line for daycares, group homes, and human services organizations.
Audit (premium audit)
The end-of-term review where the carrier compares your actual payroll or receipts to the estimates the premium was based on, then bills or refunds the difference. Misclassified payroll surfaces here, expensively.
Binder
Temporary written confirmation that coverage is in force before the formal policy is issued. Until you hold a binder or policy, you are not covered — a quote alone protects nothing.
Cancellation
Termination of a policy before its expiration date. Distinct from non-renewal, which ends coverage at expiration. Mid-term cancellation by an insurer is restricted by state law to specific grounds.
Care, custody, or control (CCC)
A common exclusion limiting coverage for damage to property you are working on or responsible for — which for a tree service can describe the very tree and yard you were hired to work in.
Certificate of insurance (COI)
A one-page summary proving coverage exists, issued to clients and landlords. It confers no rights and changes no terms — the policy form governs, which is why certificates and actual coverage sometimes disagree.
Claims-made policy
A policy that responds to claims reported during the policy period, subject to a retroactive date. Common for professional liability and A&M coverage. Switching claims-made policies carelessly can orphan years of exposure.
Declarations page (dec page)
The policy’s front page: named insureds, limits, sublimits, deductibles, premium, and policy period. The fastest place to check what you actually bought.
Dram shop liability
Liability of alcohol sellers for harm caused by patrons they served. California statutes limit these claims against licensed sellers, with a key exception for serving an obviously intoxicated minor.
Endorsement
A document that changes the policy’s terms — adding, removing, or restricting coverage. The policy you have is the base form plus every endorsement, which is why reading only the base form misleads.
Excess & surplus lines (E&S)
The market for risks admitted carriers won’t write, using more flexible rates and forms, accessed through specially licensed surplus lines brokers. Where many hard-to-place accounts find workable coverage.
Experience modification factor (X-Mod)
A multiplier comparing your workers’ comp claim history to similar businesses. Above 1.0 raises premium; below lowers it. It follows your business across carriers, so claims management pays off regardless of who writes the policy.
General liability (GL)
Coverage for third-party bodily injury and property damage arising from your operations and premises. The foundation of a commercial program — and the policy whose exclusions and sublimits deserve the closest reading.
Hard market
A market phase with rising premiums, shrinking capacity, and pickier underwriting. Classes fall out of favor wholesale, which is how well-run businesses end up non-renewed through no fault of their own.
Inland marine (equipment floater)
Coverage for movable equipment — chippers, stump grinders, cranes, tools — wherever it goes: jobsite, transit, or yard. Accuracy of the equipment schedule determines how well it works after a loss.
Loss runs
Carrier-issued reports listing every claim on your policies: dates, amounts paid and reserved, open or closed status. The commercial insurance equivalent of a credit report; nearly every new quote requires five years of them.
Non-admitted carrier
An insurer not licensed in the policyholder’s state, operating in the surplus lines market. Not backed by the state guaranty fund — a structural difference worth understanding, not automatically a mark against the coverage.
Non-renewal
The insurer’s decision not to offer a new term at expiration. Coverage continues until the expiration date. For covered California commercial policies, written notice with reasons is required 60–120 days in advance.
Occurrence policy
A policy that responds based on when the injury or damage happened, regardless of when the claim is reported. Contrast with claims-made — the distinction matters most for late-surfacing claims like abuse allegations.
Per-occurrence limit
The maximum the policy pays for any single claim or incident, as opposed to the aggregate limit for the whole policy period.
Professional liability (E&O)
Coverage for claims arising from advice or services — an arborist’s assessment of a tree’s condition, a care program’s clinical decisions. Exposures general liability forms typically exclude.
Retroactive date
On claims-made policies, the date before which incidents are not covered. Resetting it when switching policies silently erases coverage for past work — one of the most expensive fine-print mistakes available.
Sublimit
A lower cap inside the policy for a specific kind of claim — assault & battery, abuse & molestation, theft. The headline limit is marketing; the sublimits are where real claims get paid or don’t.
Surplus lines broker
A broker holding the special state license required to place business with non-admitted carriers, responsible for the filings, disclosures, and surplus lines taxes that accompany E&S placements.
Umbrella / excess liability
Additional limits stacked above underlying GL, auto, or employers liability policies. Frequently required by municipal, utility, and commercial contracts; relatively economical compared to the limits it adds.
Waiver of subrogation
An endorsement where your insurer gives up its right to recover a paid claim from a third party — commonly demanded in contracts. It must be arranged before a loss, not after.
Workers’ compensation
Statutorily required coverage for employee injuries. In California, Labor Code §3700 obligates employers to carry it. For high-hazard classes like tree care, usually the largest and hardest-to-place line.
X-date (expiration date)
The date your current policy expires — the most consequential date on your insurance calendar. Renewal marketing works backward from it; specialty placements want 60–90 days of runway before it.
Deeper dives: loss runs · non-renewal in California · hard-to-place risks & E&S