Key insurance terminology.

Bodily Injury

Physical injury to a third party.

Using it in a sentence: In the car accident, your passenger suffered bodily injury.

Binder

An agreement that provides coverage until a policy can be set up. (In home insurance, we also use binder to mean a proof of insurance, provided to lenders during home purchases or mortgage refinancing.)

Using it in a sentence:
a) This binder provides you with coverage until February 10th, by which point we will have a policy in place for you.
b) I sent the binder to your lawyer to prove you purchased insurance.

Business Interruption – Extra Expense

Payment for costs beyond normal operating expenses that an organization incurs to continue operations while property is repaired or replaced (as long as the damage is due to a cause covered under your policy).

Business Interruption – Ordinary Payroll

Payment for wages of ‘ordinary’ workers (i.e., non- management, non-specialized workers) to maintain their employment while waiting for operations to resume. Ordinary payroll can be added for 30, 60, 90, 180 days and beyond.

Business Interruption – Gross Earnings

Payment for loss of profits, continuing expenses, and management payroll during disruption to your business operations resulting from a cause covered under your policy. Payments under this coverage will stop once: 1. repairs are made and you resume operations, or 2. your indemnity period runs out, whichever comes first.

Business Interruption – Gross Profits

Payment for loss of profits, continuing expenses, and management payroll during a disruption to
your business operations resulting from a cause covered under you policy. Once repairs are completed and you reopen for business, the policy will continue to pay until: 1. your profit fully recovers to what it was immediately prior to the loss, or 2. your indemnity period runs out.

Business Interruption – Gross Rental Income

Payment for lost rental income while repairs are completed at your rental property, as long as the cause of property damage is covered under your policy.

Business Interruption – Extended Period of Indemnity

Business interruption coverage is limited to an indemnity period which is the time period for which compensation is payable under a business interruption policy. The minimum period is 12 months but this may not be enough time to rebuild. There are options for increasing to 18, 24, 36 and beyond.

Bylaws – Additional Time Required for Rebuilding

Increases the time available for repairs or rebuilding to be completed due to required bylaw changes.

Cargo Insurance

Protection against the physical loss or damage of freight from an external cause during shipping, whether by land, sea or air.

Claim

A request for compensation due to loss or damage to insured property or third parties.
Using it in a sentence: To have your stolen bike replaced, make a claim under your tenant insurance policy.

Commercial General Liability

Payment for bodily injury and property damage that occur on your premises, or as a result of your operations, products or completed work. This type of coverage also includes allegations of defamation, libel, slander, or false advertising (also known as advertising and personal injury liability). Higher limits of liability may be available above the current policy limits.

Condominium Loss Assessment

Coverage for a unit owner’s share of an assessment against all unit owners made by the condominium corporation for claims under the condominium corporation’s insurance policy.

Example: To pay the deductible or pay for expenses beyond the coverage limits.

Contract Bonding

A guarantee for the faithful performance of a construction contract and payment of all material and labour bills related to that contract. A performance bond covers faithful performance while a payment bond guarantees payment of material and labour expenses.

Contractors Equipment Floater

Coverage for mobile equipment owned by contractors such as backhoes, forklifts and excavators.

Crime

Coverage for lost money and securities from a variety of causes including employee dishonesty.

Cyber Risk

Coverage for the financial losses and expenses that result from cyberattacks and data breaches.

Damage to Hired Auto

Coverage for loss or damage arising from the care, custody or control of ‘hired automobiles’ resulting from causes covered under your policy.

Declarations / Declaration Page

The page(s) in a policy that outlines the general information, like the insured’s name and address, details of the insured property, the limits of insurance, the premium, and the effective and expiration dates of the coverage.

Using it in a sentence: Refer to your declaration page to find out the amount of liability coverage your business has.

Deductible

The portion of a claim you must pay before the insurance policy will respond.

Using it in a sentence: Your deductible for water damage is $2,000.

Directors & Officers Liability

Protection for the directors and officers of a corporation against damages resulting from negligent or wrongful acts in the course of fulfilling their duties.

Dwelling

A residential premises that you own and live in or rent to others. (“Dwelling” is often used interchangeably with “house.”)

Using it in a sentence: Your dwelling is insured for $450,000.

Earthquake

Coverage for the loss or damage of property and contents caused by an earthquake as well as any snowslides, landslides or earth movements occurring concurrently with and directly resulting from an earthquake shock.

Earthquake Deductible Buy-Down

A way to reduce your earthquake deductible.

Effective Date

The date on which coverage under your insurance policy commences.

Using it in a sentence: The effective date of your policy is January 12, 2021.

Employee Benefits Liability

Protection for you (as an employee) against liability arising out of an error or omission in the administration of an employee benefits program.

Example: The employer fails to advise employees of a benefits program or neglects to enroll an employee onto the program.

Employment Practices Liability

Coverage for legal expenses, judgments and settlements for employment lawsuits stemming from wrongful termination, sexual harassment, discrimination, invasion of privacy, false imprisonment, breach of contract, and emotional distress.

Endorsement

An agreement added to your policy to enhance or reduce coverage or change the policy conditions, which overrides the original wording. We also use “endorsement” as a synonym for charge.

Using it in a sentence:
a) There is an endorsement on your policy adding coverage for damaged caused by sewer back-up.
b) We made an endorsement to your policy to reduce your water damage deductible.

Environmental Impairment Liability

Coverage for legal expenses, remediation and cleanup costs that result from pollution or contamination.

Equipment Breakdown

Coverage for the costs that arise when equipment breaks. Usually includes electrical and mechanical
equipment such as telephone systems, HVAC systems, electrical panels, building entry control systems, boilers and compressors.

Errors & Omissions Liability

Coverage for you against allegations of negligence, mistakes or failures in providing a professional service.

Fiduciary Liability

Coverage for sponsors, administrators and trustees of benefits plans for allegations of mismanagement, errors or omissions.

Fine Arts Floater

Coverage for works of art, usually written on a valued basis (the coverage provided is based on values stipulated in the policy).

Floater / Schedule

Property specifically listed/itemized on your policy and insured to a certain value, typically used for high-value or unique items like jewelry, contractors tools, and farm equipment.

Using it in a sentence:
a) We will schedule your tools onto your policy so they are covered.
b) We can add a floater for the ring from your grandmother to ensure you have enough coverage for it.

Flood

Coverage for the loss or damage of property and contents caused by the rising, breaking out or overflow of any body of water whether natural or manmade and includes waves, tsunamis, tides
and tidal waves.

Forest Firefighting Expenses

Coverage for providing forest fire or grassland firefighting expenses that you are legally liable to pay by law, statute or contract.

Guaranteed Replacement Cost

A provision in your policy that ensures your home (or trailer or mobile home) is fully replaced/rebuilt following a total loss, even if the costs to do so exceed the limit of insurance under your policy.

Using it in a sentence: Your home insurance policy includes Guaranteed Replacement Cost, ensuring it will be fully rebuilt, no matter the cost, if it is completely destroyed in a fire.

ICBC Non-Owned Auto Liability

In the event that an individual driving their personal vehicle while working for your business causes a crash, this coverage protects your business against claims of property damage or bodily injury from third parties.

ICBC Special Excess Liability

Provides third-party liability protection for officers, employees, and volunteers operating vehicles on behalf of your business not owned, rented or leased by your business.

Improvements and Betterments

Coverage for permanent additions or changes made to a building by a tenant at their own expense that may not be legally removed.

Indemnity

Security against a loss, or the compensation paid following a loss.

Using it in a sentence: Indemnity is provided for stolen jewelry.

Innkeepers Legal Liability

Coverage for property damage to personal property of your guests, patrons or customers while the property is under your care, custody and control and located on your premises.

Installation Floater

Coverage for property/equipment being installed, fabricated or erected by a contractor. It covers the property until the installation work is accepted by the purchaser or when the insured’s interest in the property installed ceases. This includes materials in transit to a job site and while awaiting installation on site.

Example: Materials are at a job site and someone steals them before installation.

Insured

The person/people/organization protected by an insurance policy.

Using it in a sentence: The policy documents need to be signed by the insured.

Insurer

The company providing insurance, also called a carrier.

Using it in a sentence: The insurer will send you your policy documents.

Lapse

The non-renewal of a policy, either by choice, or by failure to pay the premium in time.

Using it in a sentence: If you do not pay your premium by March 3rd, your policy will lapse and you will no longer have any coverage.

Legal Expense

Payment for the costs to address legal issues commonly faced by business owners. The policy will provide unlimited access to telephone legal advice and cover your legal costs and gaps in traditional commercial insurance coverage for:

• Employment disputes
• Contract disputes
• Property disputes
• Tax disputes
• Defence against criminal charges
• Bodily injury claims

Liability insurance

Coverage for defense and settlement costs when you are charged with causing damage and/or bodily injury to a third party or their property.

Using it in a sentence: Liability insurance is an important part of your financial health

Loss

The basis of a claim, usually the damage, destruction, or disappearance of property, or bodily injury.

Using it in a sentence: This wind damage is the second loss you have sustained this year.

Market

An insurance company, or a collective term for many insurance companies who offer similar products.

Using it in a sentence:
a) We will move your policy to a new market.
b) The property insurance market is hard right now, so it is difficult to find a low premium with any company.

Material Change

A change to information that is used to determine premium, risk level, and acceptability to an insurer.

Using it in a sentence: You must inform your home insurance broker if you take out a second mortgage on your home because this is a material change.

Miscellaneous Property Floater

Insurance for loss or damage to business property that is not contained at a fixed location.

Example: Includes handheld items such as tools, generators and laptops.

Negligence

Failure to do something that a reasonable person would do, or doing something that a reasonable person would not do.

Using it in a sentence: The business owner demonstrated negligence by not warning customers of a slippery floor after mopping the entryway.

Non-Owned Auto

Protects you against third-party claims arising out of an individual using their personal vehicle while conducting business on your behalf.

Office Contents Coverage

Insurance for loss or damage of office contents and equipment.

Peril

Anything that may cause a loss, such as fire, burglary, landslides.

Using it in a sentence: On Vancouver Island, earthquakes are a worrisome peril.

Personal Injury

Non-bodily injury to a person, such as libel or slander.

Using it in a sentence: His son’s inaccurate and defaming tweets towards his English teacher constitute personal injury.

Policy

The contract of insurance between the insurer and the insured that documents the terms, conditions and agreements of the contract.

Using it in a sentence: Your policy includes a list of conditions that you must meet for coverage to be valid.

Premium

The money paid in exchange for insurance coverage.

Using it in a sentence: You must pay your premium in order for coverage to continue.

Premises

The location of a residence or business insured by a policy.

Using it in a sentence: In addition to the house, there is a detached five car garage on the premises.

​​Product Recall

Pays for expenses directly incurred if your products are withdrawn due to a known or suspected defect, deficiency, inadequacy or dangerous condition in such products.

Reduced Glass Deductible

Lowers the glass deductible on your policy.

Example: Using it to go from $1,000 down to $500.

Reinstate

To get a policy back in force after it was cancelled or lapsed.

Using it in a sentence: If you pay your premium in full before January 30th, we can reinstate the policy.

Replacement Cost

The cost to replace property with a new one of the same kind and quality, without depreciation.

Using it in a sentence: The replacement cost value of your trailer is $20,000.

Risk

The possibility of loss or damage. Alternatively, we also use “risk” to refer to property or objects we insure.

Using it in a sentence:
a) With a wood-burning stove in your basement, the risk of fire increases.
b) They have two risks: their house in Saanich, and their cabin on Salt Spring.

Sewer and Drain Back-up

The back-up or overflow of water in sewers, sumps, septic tanks and drains within the area bounded by bearing walls and foundations of the building.

Stock Throughput Policy

Insures your stock and inventory (including finished and raw stock) while in transit by land, sea or air, while in storage facility, or while at your own premises

Subrogation

The process by which the insurer attempts to recover the costs of your claim from a third party who was responsible for the claim.

Using it in a sentence: The insurer will pay your loss and then the claim will be subrogated.

Tenant’s Legal Liability

Protection for tenants from accidentally damaging their leased space. The limit chosen under this coverage should represent a sufficient amount to fully repair your leased space, should it be
a substantial loss.

Example: a tenant starts or fails to prevent a fire which causes extensive damage to the landlord’s property. The tenant would then be held responsible for the repair or replacement of the damaged property.

Terrorism

Commonly excluded in commercial property insurance policies, this coverage pays for property damage and business interruption as a result of terrorist attacks.

Umbrella Liability

Additional coverage when other liability coverage limits are exhausted.

Underwriter

A person who works for an insurance company and reviews risks to determine their acceptability.

Using it in a sentence: The underwriter has asked for more information on your woodstove.

Volunteer Accident Coverage

Payment to compensate individuals for any accidents, injuries or illnesses that result from volunteering for you.

Warranty

A condition placed on your policy indicating what you must or must not do in order for your coverage to be valid.

Using it in a sentence: There is a warranty on your policy indicating you may only operate your boat within certain navigational limits.