Commercial Glossary of Terms(click here for Glossary of Terms)
Commercial Liability Insurance Terms
Business Auto Insurance Terms
Commercial Umbrella/Excess Terms
Workers Compensation Insurance

Accounts Receivable
Provides for the cost to research or the reconstruction of records, or the actual loss of income due to the inability to collect sums due the insured as a result of the destroyed records.

Agreed Amount
This coverage is used to remove the coinsurance requirement for covered property.  With it your company agrees that the amount of coverage purchased is adequate, and any coinsurance requirements are waived if the limit of insurance equals the agreed value.

"All Risk"
All Risk covers all perils and risks of loss that are not specifically excluded.

Co-Insurance
Provides that the limit specified for real property, personal property or business income is equal in percentage to the actual exposure as indicated on the declarations page.  Severe penalties may be levied in the event of a loss if the insured does not carry insurance to full value.

Computer Fraud
This insurance will cover loss or damage to money, securities, and other property due to computer fraud.  Computer fraud is defined as "theft of property by and directly related to the use of a computer."

Consequential Damage
This endorsement is used to extend your Boiler and Machinery policy to insure against loss of perishable goods from lack of power, light, heat or refrigeration that results from an accident.  This is important since you are involved with products that are susceptible to this kind of loss.

Employee Dishonesty
This coverage is used to protect against loss of money, securities or other property belonging to you, or for which you are legally liable, that results from dishonest acts of covered employees.  It pays for any one loss caused by one or more employees up to the face amount stated on the form.
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Equipment Breakdown Policy
This policy is designed to protect against loss to covered property that results from mechanical breakdown, electrical damage, explosion of a boiler or other covered events as specified in the form.  The policy can be used to insure a wide variety of property items that are exposed to breakdown related exposures including computers, printers, copiers, fax machines, heating and cooling systems, switch panels, productions machinery, etc.
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Explosion
This endorsement extends your Boiler and Machinery policy to provide coverage for certain explosion losses not covered under your Property policy.
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Extortion Coverage
This endorsement is used to extend the Crime policy to cover loss of money, securities, or other property resulting from the surrendering of property away from your premises as a result of threat to do bodily harm.  This insurance only covers claims related to the threat of bodily injury.
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Forgery or Alteration
This coverage protects you against loss due to the forgery or alteration of checks, bank drafts, promissory notes, or other similar financial instruments drawn against your bank account.  It does not however cover dishonest acts of your employees, which must be insured with Employee Dishonesty Coverage.
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Functional Replacement Cost
Under this valuation method, equipment loss will be valued as the cost to repair or replace equipment with functionally comparable equipment of current generation.
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Hazardous Substance Limit Reviewed
This coverage is used to cover expenses you incur to pay for the clean up, repair or disposal of covered property that is declared hazardous by a governmental agency.
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Inflation Guard
Automatically increases the limit of insurance for property coverage on a pro-rate basis by the percentage indicated on the declarations page to offset the effect of inflation on construction costs.
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Money Orders and Counterfeit Paper Currency
This coverage is used to protect against loss caused by your accepting counterfeit currency that is acquired during your regular course of business, or money orders that are not paid on presentation to the issuer.
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Premises Burglary
This form is used to cover loss or damage to property other than money and securities while inside your premises.
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Premises Theft/ Robbery Outside
This endorsement is used to extend the Crime policy to cover theft of your property while located inside the premises (than money and securities), and for robbery outside the premises to property in the care, custody, or control of an armored car company or messenger.
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Rental Income
Provides coverage for loss of rental income that would have been earned or incurred as the result of a covered cause of loss.
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Replacement Cost
Provides for the cost to repair or replace damaged property without deduction for depreciation.
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Robbery/Safe Burglary
The coverage is used to insure your personal property other than money and securities from the perils of premises robbery, safe burglary, and messenger robbery.  The limits provided for these three coverages are specified under the form.
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Special Form
Provides coverage for direct damage to real property, personal property, or business income against risks of physical loss except those excluded.
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Theft, Disappearance, and Destruction
This coverage is used to insure against loss of money and securities caused by theft, disappearance, or destruction while located inside or outside your premises.  It also covers damage to premises resulting from actual or attempted theft.  It insures only money and securities and not other types of property.
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Utility Interruption
This coverage extends your Boiler and Machinery policy to protect against loss that occurs because of an interruption of services from facilities that supply you with water, power or communications by a covered peril.
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Valuable Papers
Provides for the cost to research, replace or restore lost information of business records (excluding accounts receivable, tapes and recording media.
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Commercial Liability Insurance Terms

Advertising Injury
Protects the insured against oral or written publication that violates a person's right of privacy; infringement of copyright, title or slogan; and misappropriation of advertising ideas, style or doing business, which are initiated during the policy period.
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Claims-Made
Provides protection for only those claims reported or first made during the policy period or during any previous period that is stated in the Prior Acts or Retroactive Date option of your policy. This option allows you to keep coverage in force under consecutive Claims-Made policies.
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Completed Operations
Bodily injury or physical damage resulting from an operation or service that you have performed.
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Contractual Liability
Provides for bodily injury or property damage which the insured is obligated to pay by reason of, or the assumption of liability in an insured's contract or in the event of tort liability.
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Copyright
The rights in original Works of Authorship fixed in tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device as conferred by 17 USCA 106 provided such Works of Authorship having been registered in the U.S. Copyright office under 17 USCA 408.
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Cross Suits Coverage
Typically included as an exemption from the Insured versus Insured exclusion.  This provision provides coverage for cross claims brought by an insured against another insured for contribution or indemnity as a result of an underlying Claim which would be covered if brought directly against such insured.
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Employment Practices Liability
Protects employers against claims made by employees for discrimination (age, sex, race, disability), wrongful termination, and sexual harassment.
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Fire Legal Liability
Your liability resulting from fire damaging property of others, specifically premises leased or rented to the insured when fire damage arises as a result of the insured's negligence.  Great care should be taken to ensure that this limit is adequate as it relates to the lease or rental agreement of the insured.
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General Aggregate
The total limit available for all coverages excluding products liability and completed operations liability.
Independent Contractors - Your liability resulting from acts of your subcontractors, plus defense costs in the event the claim is groundless.
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Infringement
The unauthorized use, sale or offer for sale, by the Named Insured of any manufactured product in violation of the enforceable and valid rights of another arising from the grant by the United States Patent & Trademark Office and/or the U.S. Registrar of Copyrights of any Patent, Trademark or Copyright.  Infringement shall include in its meaning contributory infringements and inducement to infringe.
Intellectual Property Insurance: Covers judgments and legal defense costs if a competitor sues you for copyright, trademark, or patent infringement.
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Medical Payments
Provides automatic medical payments for bodily injury arising on the insured's premises.  This "guest" coverage helps alleviate litigation proceedings when the sustained injuries are minimal.
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Occurrence
Provides coverage for bodily injury or property damage that occurs during the policy period, regardless of when the claim for injury is first made.
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Patent
Any unexpired U.S. Patent included in Covered Litigation.
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Premises & Operations
Bodily Injury or Property Damage caused by any of your operations on or away from your premises.
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Products Liability
Bodily Injury or Property Damage caused by the products you manufacture, assemble, or sell; and the use of that product after you have sold or relinquished control.
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Personal Injury
Libel, slander, defamation of character; wrongful entry, invasion of privacy and false arrest.
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Trade Dress
The appearance and image of a manufactured product taken as a whole, including but not limited to the features of size, texture, shape, color or color combinations and graphics.  Trade Dress does not include particular advertising or marketing techniques used to promote the product's sales.
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Business Auto Insurance Terms

Collision
Provides coverage to an insured's vehicle for collision or overturn.
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Collision Damage Waiver
Provides waiver of collision deductible in case of an accident with an "uninsured vehicle."
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Combined Single Limit
Provides coverage for bodily injury and/or property damage caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto."
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Comprehensive
Provides coverage to an insured's vehicle for any cause except collision or overturn.
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Drive Other Car Coverage
This endorsement is used to protect employees or other specified individuals when they borrow or rent vehicles for personal use, and do not have the protection of a Personal Auto policy.
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Hired Auto Liability
Liability coverage for those vehicles hired or rented by the Named Insured.
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Hired Auto Physical Damage
Extends the physical damage coverage to autos rented, hired or borrowed by the insured.
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Medical Payments
Provides medical expenses incurred by an insured, or an occupant of the vehicle, for necessary medical and funeral expenses caused by an accident.
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Non-Owned Auto Liability
Liability coverage for vehicles owned by your agents, but driven on your behalf.
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Rental Reimbursement
Pays for expenses incurred to rent a replacement vehicle because of loss to a covered vehicle.
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Uninsured Motorist
Provides coverage for bodily injury resulting from an accident with an uninsured vehicle.
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Underinsured Motorist
Provides coverage for bodily injury resulting from an accident with a vehicle insured for lower liability limits.
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Commercial Umbrella/Excess Terms

Aggregate Limit
The maximum amount stated in the policy for which the insurer will be liable, regardless of the number of covered "claims" or "suits".
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Following Form Excess Policy
Identifies an "excess" liability policy that follows the underlying policies for most policy provisions.  The policy may stand alone for certain exclusions, conditions, etc., while relating back to the underlying coverage for most provisions.  This type of policy form is typically used excess of scheduled underlying insurance and usually contains a requirement that the insured maintain scheduled underlying insurance.
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Impaired Property
Tangible property, other than "your product" or "your work," that cannot be used or is less useful because: It incorporates "your product" or "your work" that is known or thought to be defective, deficient, inadequate, or dangerous; or you have failed to fulfill the terms of a contract or agreement.
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Retained Limit
The greater of:  That amount of "underlying insurance" applicable to a "claim" or "suit," whether such "underlying insurance" is collectible or not; or the amount of "self Insured retention" for "claims" or "suits" not covered by applicable "underlying insurance."
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Ultimate Net Loss
The total amount of damages for which you are found legally liable for a covered "claim" or "suit for "bodily injury", "property damage", "personal injury" or "advertising injury."
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Umbrella Liability Policy
This form provides a higher limit of coverage that is excess over scheduled underlying policies.  It provides three purposes: (1) It provides excess limits when the limits of underlying liability policies are exhausted by the payment of claims, (2) it drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims, and (3) it provides protection against some claims not covered by the underlying policies, subject to the assumption, by the named insure, of a self-insured retention.
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"Your Product"
Any goods or products, other than real property, manufactured, sold, handled, distributed, or disposed of by you, others trading under your name, or a person or organization whose business or assets you have acquired.  Also containers (other than vehicles), materials, parts, or equipment furnished in connection with such goods or products.
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"Your Work"
Work or operations performed by you or on your behalf; and materials, parts, or equipment furnished in connection with such work or operations.
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Workers Compensation Insurance

Protection which provides benefits to employees for any injury or contracted disease arising out of and in the course of employment. All states have laws which require such protection for workers and prescribe the length and amount of such benefits provided. This coverage is mandatory in the state of California.
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