Business insurance glossary.
Plain definitions of the contract, certificate, endorsement, audit and renewal terms you meet in leases, subcontracts and policies. General information to help you read what you are asked to sign.
A
ACORD 25
ACORD 25 is the standard Certificate of Liability Insurance form used to summarize general liability, auto, umbrella and workers compensation coverage.
Read the definitionAction over exclusion
An action over exclusion removes general liability coverage when your injured employee sues a third party who then seeks recovery from you under contract.
Read the definitionAdditional insured
A person or organization added to your policy by endorsement, gaining limited coverage for claims arising from your work or operations.
Read the definitionB
Binder
A binder is a temporary written agreement confirming that coverage is in force while the full policy is being issued.
Read the definitionBlanket additional insured
An endorsement that automatically makes a party an additional insured when a written contract requires it, without naming each party.
Read the definitionBroker of record letter
A broker of record letter is a signed instruction telling an insurer to recognize a new broker for an existing policy or upcoming renewal.
Read the definitionC
Certificate holder
The certificate holder is the party that receives a certificate of insurance. Being the holder does not by itself give any policy rights.
Read the definitionCertificate of insurance
A one page summary showing which policies were in force when it was issued, with insurers, limits and dates. It does not change coverage.
Read the definitionCG 20 10
ISO endorsement CG 20 10 adds a scheduled owner, lessee or contractor as an additional insured for your ongoing operations performed for them.
Read the definitionCG 20 37
ISO endorsement CG 20 37 extends additional insured status to a scheduled party for injury or damage arising from your completed work.
Read the definitionCG 20 38
CG 20 38 automatically makes your client, and other parties your written construction contract requires, additional insureds for your ongoing operations.
Read the definitionCG 21 39 contractual liability limitation
ISO endorsement CG 21 39 narrows the insured contract definition, removing coverage for most indemnity promises in business contracts.
Read the definitionClaims made versus occurrence
Occurrence policies cover injury or damage that happens during the policy period. Claims made policies cover claims first made during the policy period.
Read the definitionCoinsurance
A property policy condition that reduces claim payments if the property is insured for less than a set percentage of its value.
Read the definitionContractual liability
Coverage in a general liability policy for tort liability your business assumes under an insured contract, such as an indemnity clause.
Read the definitionD
Declarations page
The declarations page summarizes a policy’s key facts, including named insured, policy period, coverages, limits, premium and attached forms.
Read the definitionDeductible
A deductible is the part of a covered loss the business bears, either subtracted from the claim payment or repaid to the insurer.
Read the definitionE
Each occurrence limit
The each occurrence limit is the most a liability policy will pay for all damages arising from a single occurrence, however many people claim.
Read the definitionEndorsement
An endorsement is a written change to an insurance policy that adds, removes or modifies coverage, often to meet contract requirements.
Read the definitionExperience modification rate
The experience modification rate, or experience mod, adjusts workers compensation premium based on claims history compared with similar businesses.
Read the definitionF
G
H
L
N
P
Payroll classification code
A classification code groups employees by the type of work they do and sets the rate used to calculate workers compensation premium.
Read the definitionPer location aggregate (CG 25 04)
Endorsement CG 25 04 applies a separate general aggregate to each designated location, often requested by landlords and multi site businesses.
Read the definitionPer project aggregate (CG 25 03)
Endorsement CG 25 03 gives each designated construction project its own general aggregate limit, so claims on one job do not erode another.
Read the definitionPrimary and noncontributory
Wording that makes your policy respond first for an additional insured, without seeking contribution from that party’s own insurance.
Read the definitionProducts and completed operations
Coverage for injury or damage caused by products you sold or work you finished, after they leave your hands, usually with its own aggregate.
Read the definitionR
Residential exclusion
An endorsement that removes general liability coverage for work on residential projects, sometimes including condos, townhomes or tract housing.
Read the definitionRetroactive date
The retroactive date on a claims made policy is the earliest date an incident can occur and still be covered.
Read the definitionS
Scheduled additional insured
A scheduled additional insured is named specifically on an endorsement issued by the insurer, rather than qualifying through blanket contract wording.
Read the definitionSelf insured retention
A self insured retention is the amount the business must pay itself, often including defense, before the insurer’s coverage begins.
Read the definitionSubcontractor exclusion
An endorsement that limits or removes general liability coverage for claims arising from work performed by your subcontractors.
Read the definitionT
U
Umbrella versus excess
Both add limits above primary policies. An umbrella may also fill some gaps in those policies, while excess usually only extends the underlying coverage.
Read the definitionUninsured subcontractor charge
An audit charge added when a business pays subcontractors who cannot show valid insurance, treating those payments as the business’s own exposure.
Read the definitionW
Waiver of subrogation
A waiver of subrogation gives up an insurer’s right to recover a paid claim from a specific party, usually because a contract requires it.
Read the definitionWorkers compensation premium audit
A premium audit compares actual payroll and job classifications with the estimates used at policy start, then adjusts the workers compensation premium.
Read the definitionGeneral information only. It is not legal or insurance advice. Only issued policy documents and endorsements describe actual coverage.
Glossary, answered
What is the difference between a certificate of insurance and an endorsement?
A certificate of insurance summarizes a policy at a point in time and cannot change it. An endorsement is part of the policy itself and changes what it covers, such as adding an additional insured or a waiver of subrogation. Contracts usually need the endorsement, with the certificate as evidence.
Which insurance terms appear most often in contracts?
Additional insured, waiver of subrogation, primary and noncontributory, per project aggregate, completed operations and notice of cancellation appear in most subcontracts, leases and vendor agreements. Each has its own entry in this glossary with an example.
Can SF Coverage check these terms in my contract?
Yes. The free contract check cites every insurance requirement in a lease, subcontract or client agreement and checks it against your policy wording. Our standard is a result within one business day. It is general information, not legal advice.