Not understanding a word in your insurance policy can be tough. You want to protect your business; however, not knowing what you are signing for can be tricky. Luckily, learning’s never been easier.
Get to know common commercial insurance terms used in the industry. Keep reading and be ready to make informed decisions while picking an insurance agency in CT!
12 Most Common Insurance Terms
Here is our compilation of the most common commercial insurance terms and their meaning:
Actual Cash Value (ACV)
Actual cash value (ACV) coverage pays you what your property is worth today after a loss. Actual cash value is determined by taking what it would cost to purchase your property new today and subtracting depreciation for things like age, condition, and obsolescence.
Admitted Insurance Carriers
An admitted insurance business is backed by the state, which implies:
- Your state’s department of insurance has regulatory requirements for your insurance company to follow.
- If the insurance company faces financial difficulty, the government will intervene to make payments on claims as needed.
Non-Admitted Insurance Carriers
A non-admitted insurance firm isn’t licensed by the state, which means:
- The insurance company may or may not follow state insurance laws.
- Even if the insurance company goes bankrupt, claims may not be paid if the case is still open at the time of the bankruptcy or financial failure.
- If customers feel that their case was mishandled, they can’t appeal to the state insurance department.
Replacement Cost (RC)
A replacement cost coverage covers the expense of repairing or replacing the damaged property without taking depreciation into account. If a covered peril damages your belongings or home, you may be eligible for this sort of coverage.
Business Owners Package (BOP)
A Package Policy is a kind of insurance policy that usually covers several types of insurance. The most frequent Package Policy combines property insurance, such as buildings or business contents coverage, with liability insurance, such as premises liability or product liability.
Umbrella insurance is a form of extra coverage that covers you if your liability policy’s limits are insufficient to cover all of your losses. If you didn’t have this sort of commercial insurance, you would be required to pay out of pocket for liabilities that exceeded your coverage limitations. This can include legal expenses, medical expenses, etc.
Deductible/Retention/Self-Insured Retention (SIR)
A deductible is an amount you must pay out of pocket before your insurance company starts paying. They assist in keeping insurance premiums low for small company owners while minimizing the number of little claims insurers have to handle.
Errors And Omissions
Errors and omissions insurance is a type of specialized liability protection that is not covered by standard liability coverage. If a customer sues you for negligent acts, errors, or omissions that result in a financial loss, this policy protects you and your company from liability.
General liability insurance, also known as commercial liability insurance, protects you and your company from “general” claims involving bodily injuries and property damage.
In general, commercial Inland Marine insurance covers any movable, transportable, or communicating property. The contractor’s equipment, vital artwork, such as paintings, photographs, and sculptures, among other things, are some of the items that Inland Marine Insurance covers.
Risk management is the practice of identifying, assessing, and controlling risks to a company’s assets and profit. Financial risks, legal liabilities, technological difficulties, strategic management errors, accidents, and natural catastrophes are all factors that can endanger your business.
This insurance provides wage replacement and medical benefits to team members who sustain a work-related injury or illness.
Once you know what commercial insurance terms mean, it’s easier to choose the type of coverage that will best serve your business.
If you’re hesitant about which policy is right for you, talk with a local agent specializing in commercial insurance products and services. Your agent can help answer any questions or concerns so that you feel confident about selecting an appropriate package at a fair price point.
Paradiso Insurance: Connecticut’s Trusted Agents
Paradiso Insurance has been providing commercial insurance services for years in Connecticut. Our dedicated and efficient team will guide you through our packages, explaining them to you so that you can make the right decision.
We have been an insurance agency in CT for a long time, meaning we know our community. At Paradiso Insurance, we want to ensure you’re properly covered; we adjust our plans to your needs and budgets. Work with us for your safety!