Virtually every business owner will want to take out some form of insurance to protect their assets against threats – that much is a fact of life. But unfortunately, the business insurance world can often be a confusing one, riddled with terms, conditions and technical jargon.
To make sure that you’re getting the cover that’s best suited to your business’s needs, it’s important that you thoroughly understand the insurance jargon included in your policy. To help, we’ve created this business insurance glossary so you can do just that.
Damage that is caused by mistake, and without intent. Also, damage which could not have been foreseen or prevented.
An event outside of any reasonable human control, such as a natural disaster. Usually severe or extreme.
A change that is made to the wording of an insurance policy after it has been taken out. This could be due to a change in business premises or employees, for example. Amendments may sometimes result in price alterations.
Custom-made cover, designed to suit the insurance needs of one business specifically. See also commercial combined insurance.
A (typically intentional) break of the terms of an insurance contract, usually rendering it null. For example, if false information was provided for an insurance policy, then the insurer would likely consider the policy’s terms as breached.
Cover that protects a physical structure – e.g. business premises – against risks. Click here to read more about buildings insurance.
A form of cover that can financially reimburse a business, if it is prevented from operating at full capacity. Click to get more information on business interruption insurance.
When an insurance contract is terminated prior to its stated and agreed end date.
A payment request submitted to an insurance company by the insured party.
A custom made insurance policy that is shaped to the individual needs of a business, and includes a number of forms of protection. See also bespoke insurance.
An informal term used in reference to an insurance policy that protects against all of the major risks a business faces, as opposed to just some of them.
The act of intentionally withholding relevant information from an insurer, for example to try and affect the price of a policy.
A term used to refer to the most common types of cover that a business may take out.
Another word for the protection offered by an insurance policy.
Cover designed specially to cover the liability that comes with executive level employees. Read more about D&O insurance here.
A form of cover needed to protect against the event that employees are injured in the workplace. It is legally mandatory for many businesses. Click here to read more about employers’ liability insurance.
Cover designed to protect against threats introduced in an event setting, that would otherwise not be covered by a standard policy. For more information on event insurance, click here.
Specific terms or circumstances that are not covered by a given policy. Exclusions can sometimes be covered with an additional extension to a policy.
Additional protection that is added to cover circumstances that are typically excluded from a policy.
Insurance that can protect items while they are being transported. See our goods in transit insurance page for more details.
The party who takes out the insurance; the business.
The party who provides the insurance cover; the insurance company.
The maximum amount that can be paid out under one type of cover.
Avoidable damage caused as a result of an intentional act, for example vandalism or arson.
Cover that protects items while they are being transported overseas.
Failure to act in preventing loss that could have been avoided.
Usually used in reference to contents insurance, where items are replaced with newer versions when damaged. See also indemnity insurance.
The act of taking out insurance that is superfluous or covers events not relevant to the insured business.
An insurance policy that incorporates a number of different types of cover as one entity.
A hazard that a business may be exposed to, and can insure against. Also referred to as a risk.
Cover that applies only in the event of certain, given perils. Also referred to as a named-peril basis. See also all risk insurance.
The insured party; the party that takes out the insurance.
The cost of an insurance policy, paid by the insured party.
To find out how much product liability insurance costs, click the link
A type of insurance that protects a business in case they are deemed liable for causing injury or damage to a third party . It is legally mandatory for businesses in certain sectors. Visit our professional indemnity insurance page for more information.
When an insurance policy reaches its agreed expiry date, but is extended for a longer period of time.
The process of analysing and determining which threats a business is exposed to.
Taking steps to minimise the impact of risks and reduce the likelihood of them materialising.
An involved party other than the insured (the first party) and the insurer (the second party). Often the party suffering damage or injury at the liability of the insured business.
The act of failing to take out comprehensive enough cover to account for the risks likely to affect a business.
A risk or threat that could not have been predicted or avoided.
James is an online content creator at Make It Cheaper. Having previously created a variety of content for a number of websites and media outlets, James focuses on making it easy for SME owners to find interesting and engaging content - as well as useful guides and online tools.You can email James at email@example.com
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