Insurance words, translated.

Jump to a section: The paper you'll actually touch · Liability words · Work comp words · Business property & the package · Home & auto — the personal side · Life insurance, without the pitch · Money & market words

The paper you'll actually touch

Dec page

Short for declarations page — the front page of your policy: who's insured, what's covered, the limits, the price. If you text me a photo of one thing, make it this; I can tell you a lot from it.

Certificate of insurance

A one-page snapshot proving a policy exists — who's insured, for what, through when. It's evidence, not coverage: the policy behind it is what pays. General contractors (GCs), landlords, and delivery apps ask for these constantly — usually as just “send me a COI” — and if you're my client, getting one is a text. There's a whole guide on this one.

Additional insured

Someone else — usually the general contractor or your landlord — added to your policy so it also protects them for the work you do for them. It's the most common thing a contract demands and one of the most misunderstood: it stretches your policy over them, it doesn't buy them their own. And being listed on the certificate isn't the same as being endorsed onto the policy itself — bigger GCs ask for the endorsement, and that's a request to forward to me, not to guess at.

Waiver of subrogation

Normally, after your insurance company pays a claim, it can chase whoever caused the loss to get its money back — that chase is called subrogation. A waiver is your company agreeing not to chase a particular party. Contracts demand it so the parties can't end up suing each other through their insurance companies. What you're agreeing to when you sign one: your insurance company eats the loss without pointing at the other party — and your policy has to allow that. Send me the contract language before you sign; adding the waiver is routine when it's done ahead of time, expensive when it's discovered after a claim.

Primary and noncontributory

More GC-contract language, usually in the same breath as additional insured and waiver of subrogation. It means your policy pays first, without asking the GC's own insurance to chip in. Whether your policy actually says that is an endorsement question — so don't just initial the requirement; forward it to me and I'll tell you whether your policy already answers it.

Endorsement / rider

A change made to your existing policy — adding a truck, a driver, a location, a coverage, a person. Same idea, two names: property and business policies call it an endorsement, life policies call it a rider. Policies aren't carved in stone; they're meant to change as your life does. When something changes, text me — that's the whole process.

Exclusion

What the policy says it will not do. Honestly the most important part to read, and the part nobody reads. Two policies with the same price can be worlds apart in the exclusions — it's where cheap policies hide their cheapness.

Named insured

Who the policy actually protects, by exact name. This matters more than people think: if you formed a new LLC and the policy still names the old one, the new company may be walking around bare — and a claim can get fought over exactly that mismatch. Same trap with DBAs and personal-vs-company names: the name on the policy, the name on the contract, and the name on the bank account should tell one story. Entity names on policies need to match reality — it's one of the first things I check.

Binder

Temporary written proof that coverage is in force before the actual policy documents show up. It's real coverage, not a promise of coverage — lenders and closings run on binders all the time.

Cancellation vs. non-renewal

Two different endings. Cancellation kills the policy mid-term — usually for non-payment, and the notice has a date on it: pay before that date and the policy never skips. Non-renewal means the company finishes your term but won't offer another one. Neither is the end of the world, but both follow you — tell your agent immediately so the story gets ahead of the record.

Hold harmless / indemnification

Contract language — in most leases and GC agreements — where you promise to take responsibility for certain claims instead of the other party. Slow down here: that promise is yours whether or not your insurance stands behind all of it. The insurance question before you sign is “does my policy back what I just promised?” — send me the clause and I'll tell you what I see. The legal half belongs with your attorney.

Loss runs

Your official claims history, pulled from the insurance company — think of it as the insurance version of a credit report. Every new company you shop wants to see it, and clean loss runs are worth real money.

Liability words

General liability

The one every contract asks about: injuries and property damage your operation causes to other people and their stuff. Not your own property, not your crew's injuries — other people's. In Utah, licensed contractors now need at least $1 million per occurrence.

Per occurrence vs. aggregate

Two limits on the same policy: what it'll pay for one event, and the most it'll pay in the whole year. A “$1M/$2M” policy means a million per event, two million total for the year. Bigger GCs sometimes require a per-project aggregate — the yearly cap counted per job instead of across all your jobs at once; that's an endorsement, so check before you assume.

Umbrella

Extra limits that sit on top of your other liability policies and pick up where they stop. The point of an umbrella is the claim nobody planned for — and if you own a business, your personal umbrella stops being optional, because your assets are a bigger target. Business umbrella and personal umbrella are separate policies — the personal one lives below — and owning a business is the classic reason to carry both.

Liquor liability

If you serve alcohol, your regular liability wasn't built for what happens after over-serving — this is the coverage that was. If there's a bar in your restaurant, this word should be on your dec page.

Host liquor liability

The version for businesses that don't sell alcohol but host the gathering where it's served — the company party, the client event. It's usually already inside general liability. But if serving alcohol is part of the business, host liquor is not enough — you need the real thing above. Hosting private events at your restaurant doesn't change that; the sale is still yours.

EPLI

Employment practices liability — claims from employees and job applicants: wrongful termination, discrimination, harassment. This one's personal for me: my first business got sued by a job applicant I never hired, and the coverage I needed wasn't in my stack. Now I bring it up before anyone asks.

Hired & non-owned auto

Covers the business when employees drive their own cars on company errands — deliveries, supply runs, the bank. Their personal auto policy backs away from business use; this is what steps in for the company's exposure.

Professional liability / E&O

Coverage for mistakes in advice, design, or professional services. Worth knowing because general liability answers accidents, not bad advice or poor workmanship — redoing your own bad work is on you, on every policy I've ever read. And if what you sell is products rather than advice, the entry you actually want is the next one.

Product liability

Injuries or damage caused by something you made, sold, or shipped — it lives inside general liability under the name “products and completed operations.” If physical product goes out your door, this is quietly one of your biggest exposures — worth asking where that limit sits and what it excludes, before a customer asks for you.

Cyber liability

Answers a breach: stolen card numbers, a locked-up system, the notification and cleanup costs that follow. If you take cards or keep customer information — and every restaurant does — this stopped being a big-company problem years ago.

Work comp words

Work comp

Pays medical bills and lost wages when your people get hurt working — and just as important, it's what stands between you and an open-ended lawsuit when that happens. Required in Idaho and Utah from the first employee. The full guide is here.

Class code

The code describing what kind of work your people do — and the single biggest driver of your work comp price, because every code carries its own rate. Wrong code, wrong price, sometimes for years. A bookkeeper who tracks payroll by class of work is worth their fee at audit time.

Experience mod

A multiplier built from your claims history — 1.0 is average, below saves you money, above costs you. Two things owners learn the hard way: it follows the ownership, not the business name, so a fresh LLC doesn't reset it; and every insurance company reads it from the same shared database.

Premium audit

Your work comp price all year is an estimate; the audit is the year-end settling-up — the “true-up,” they'll call it — against real payroll, real class codes, and whatever your records can prove. Messy records mean the auditor makes the assumptions — and they don't go your way. Package policies can get audited too.

The state fund

A state-backed insurer that takes the businesses others won't — which is why newer businesses often start there. Nothing wrong with it. But if you've got a couple of clean years behind you, you probably don't have to be there, and that's where real savings hide.

Assigned risk pool

The market of last resort — when no company will take you voluntarily, the state makes one cover you, at a surcharge that's run around 50% over regular rates in Idaho recently. If you're in the pool, the project is getting you out of it.

The “if any” policy

A work comp policy with no payroll on it — no employees on the books — so it doesn't cover the owner, it exists to cover anybody you hire from the moment you hire them, and it produces the certificate GCs demand from owner-only subs. The right tool in exactly one situation. The 1099 guide covers when.

Pay-as-you-go

Work comp premium calculated from each real payroll run instead of a year-ahead estimate — it links to QuickBooks or most any accounting system. Better cash flow, smaller audit surprises, less busywork.

Owner exemption

In both of my states, owners are often not covered by the business's own work comp unless somebody chose otherwise — and family members have their own rules. Exempt doesn't mean protected: it means the policy pays you nothing if you're the one hurt. The details, both states, are in the work comp guide.

Business property & the package

The package

Property and liability bundled as one policy — for my clients it's the restaurant package or the contractors package. Built from dozens of pieces and extremely customizable, which cuts both ways: easy to overpay for what you don't need and miss what you do.

BOP

Business owners policy — the small-business version of the package: property, liability, and usually business income, pre-bundled for offices, shops, and smaller operations. Same idea as the package, fewer moving parts. Wondering which one you have? A restaurant with a real kitchen has usually outgrown the BOP — most of my restaurant clients are on the package. Your dec page says which; if it doesn't make sense, that's a one-text question.

Business income

When a covered loss closes your doors, this pays what the business would have earned while you rebuild — often paired with extra expense, which pays the cost of keeping some version of the operation running in the meantime. Property coverage rebuilds the building; this keeps the business alive. The most underbought coverage I see.

Spoilage vs. contamination

Two different problems that sound alike. Spoilage: the walk-in dies overnight and you eat the inventory — that's property. Contamination: a bad batch, somebody gets sick, the health department closes you — cleanup, lost days, and a customer claim, usually its own separate line. Most packages I open have one of the two, not both.

Equipment breakdown

The mechanical cousin of property coverage: the compressor seizes, the panel fries, the oven's board dies. Basic property coverage answers fire and storm damage, not machinery dying from the inside — this is the piece built for that, and for a kitchen it earns its keep.

Tools & equipment floater

Formally “inland marine” — a name that helps nobody. It covers tools, equipment, and materials away from your shop: on the jobsite, in the truck, in transit. The property section of a basic policy mostly protects things at your address; this follows the stuff that moves.

Installation floater

The tools floater's job-specific sibling: it covers the materials you're installing — the cabinets, the HVAC unit, the pipe — from the time you pick them up until the work is accepted. The gap it fills: materials you've bought but haven't finished installing often belong to nobody's policy without it.

Builder's risk

Covers a structure while it's being built — the framing, the materials on site, sometimes materials in transit. The permanent property policy takes over when the building's done. Who buys it (owner or contractor) is a contract question — settle it before the first board goes up.

Ordinance or law

After a loss, the city makes you rebuild to today's code, not the code your building was built under — and the upgrade cost isn't automatically covered. The older your building, the more this quiet coverage matters. Ask about it if your building has some years on it.

Bond

Not insurance, though it's sold next to it. Insurance protects you from a loss; a bond backs your obligation to someone else — if you don't perform, the bond company pays the person you owed — and then collects it back from you. That's the whole difference: insurance transfers a risk off of you; a bond just guarantees you'll keep your word. They come in flavors — license bonds the state requires, performance and payment bonds a project requires — and which one you need depends on who's asking. Required on most public work.

Home & auto — the personal side

The homeowners policy

Four jobs in one policy: the house itself (dwelling), your stuff inside it (personal property), what you're liable for as a person (personal liability), and somewhere to live while a covered mess gets fixed (loss of use). Most surprises come from assuming job two and job three are bigger than they are.

Replacement cost vs. actual cash value

The most expensive fine print in personal insurance. Replacement cost pays what it takes to buy or rebuild new; actual cash value subtracts depreciation first — on a fifteen-year-old roof, that difference is most of the roof. Know which one your policy says before the hailstorm, especially on roofs.

Scheduled items

Your policy has built-in caps on certain stuff — jewelry, guns, instruments, art. Scheduling an item lists it individually, for its real value, usually with broader coverage (losing a ring counts, not just theft). If it would hurt to replace, it's worth a photo and an appraisal.

Flood

Never in the home policy — flood is always separate, and “but I'm not in a flood zone” is where a lot of flood claims come from. Water rising from outside is flood; water escaping a pipe inside is your home policy. The distinction decides who pays, so it's worth two minutes of thought before the storm.

Personal liability & the personal umbrella

The liability inside your home policy covers you as a person — the dog, the trampoline, the kid's baseball. If you own a business, take this seriously: your personal assets are a bigger target, your limits should be higher than the default, and a personal umbrella over the top is the cheapest serious protection you can buy. Worth knowing why: your company shields you from business claims, but a claim against you personally looks at what you own — and your stake in the business is part of that. The whole picture for owners is here.

Auto liability limits — the three numbers

“100/300/100” means: $100k per person hurt, $300k per accident for everyone hurt, $100k for property you damage. State minimums are much lower than what a real accident costs — and the difference in premium between minimums and real limits is usually smaller than people expect.

“Full coverage”

Not a real thing — there's no policy called full coverage. It's shorthand people use for liability plus comprehensive plus collision, and it hides what actually matters: the limits and deductibles behind it. When someone says they have full coverage, the next question is “full of what?”

Comprehensive vs. collision

Collision is hitting something or being hit. Comprehensive is nearly everything else that happens to a parked or moving car: the deer, the hailstorm, the rock on the freeway, theft, the tree branch. Two coverages, two deductibles — set each on purpose.

Uninsured / underinsured motorist

The coverage that protects you from other people's bad decisions: when the driver who hits you has no insurance or nowhere near enough, this stands in for what theirs should have paid — including for your injuries. Plenty of drivers on the road carry nothing; this is you covering their gap.

Gap coverage

When you owe more on the loan than the car is worth — common in the first years — a total loss leaves you paying on a car that no longer exists. Gap covers the difference between the payout and the loan. If you financed with little down, ask whether you have it.

The toys

ATVs, boats, RVs, snowmobiles — around here, half of every driveway. The catch: they're mostly not covered by your auto or home policy once they leave your property, and sometimes not even on it. Each one either gets its own policy — a boat policy done right carries its own liability, towing, and coverage for the uninsured boater who hits you — or gets deliberately added. “I assumed it was covered” is the saddest sentence in insurance.

Life insurance, without the pitch

Term life

The simple one: a set payout for a set number of years at a set price — pure protection, no investment component, which is why it costs less than people expect, especially bought young and healthy. For most working families and business owners, this is the tool that fits.

Permanent life

Whole life, universal life — policies designed to last your whole life and build cash value along the way. They cost meaningfully more than term for the same payout, because they're doing a different job. Neither good nor bad: a different tool. Broadly, most working families buying income protection land on term; permanent tends to earn its keep for estate planning, business buyouts, and lifelong dependents. If you've been stuck not deciding for years, that usually means the decision needs ten minutes of conversation, not more research.

Death benefit & beneficiary

The payout — which generally arrives income-tax-free — and who gets it. The beneficiary form beats the will — whoever's named gets paid, period. Check your beneficiaries after every marriage, divorce, and birth; the saddest paperwork in this business is a payout going to the wrong decade of somebody's life.

Convertible term

A term policy you can swap into a permanent one later without new health questions. That conversion right is quietly one of the most valuable features on a term policy — your health can change; a conversion privilege doesn't care.

Key person & buy-sell

Life insurance the business buys, for business reasons. Key person coverage pays the company if the person it can't run without dies. A buy-sell agreement, funded with life insurance, is how surviving partners buy out a deceased owner's share without wrecking the company or the family. If your business couldn't survive losing you or your partner, this belongs on the calendar, not the someday list.

Money & market words

Premium — and why it's not the number that matters

The price of the policy itself. But on plenty of business policies the real bill is premium plus fees — policy fees, broker fees, inspection fees. When you compare quotes, compare the all-in total cost, never the premium line alone. If someone quotes you a premium, ask what the check actually is.

Deductible

Your share of a claim before the policy pays. Here's how I think about it: raise the deductible on what you could absorb, and put the savings toward the claim that could close the doors. Insurance is not a carton of eggs — it's for the losses you can't take.

Underwriting

The insurance company deciding whether it wants your risk and at what price — that's who's asking when your agent relays questions that feel nosy. Good answers, clean records, and a good story genuinely change the price; underwriters are people, and complete information is your friend.

Independent agent

An agent who represents multiple insurance companies and shops among them for you — that's me — versus one who can only sell his own company's product. Either way the agent is paid by commission, so working with one costs you nothing extra; the difference is who they can put you in front of.

Surplus lines

The specialty market for risks the standard companies won't take — new ventures, tough trades, rough claims history. Real coverage, different rules, and almost always quoted with separate fees on top — which is exactly why the total-cost rule above exists.

Hard market / soft market

The insurance industry's own weather. In a soft market companies compete and prices fall; in a hard market everyone's price rises and appetite shrinks — sometimes regardless of your own clean record. Worth knowing because a renewal jump isn't always about you, and an agent who can shop multiple companies matters most exactly then.