Business Insurance Terms EXPLAINED

By Encharter

Business Insurance Terms EXPLAINED
(Photo by Getty Images)

Click here or call (810) 653-2602 to request a Michigan business insurance quote

We all know that business insurance can get very confusing very quickly. So, to help you out, we’ve made this handy list of common business insurance terms and what they mean!

Common Business Insurance Terms:

Actual Cash Value

The current market price of the property or item

Additional Insured

People, other than the policyholder, who are covered under a policy

Assessed Value

The value of your commercial property – determined by a tax official

Business Interruption Insurance

A policy that helps cover any loss of funds due to a forced closing (that is covered by the policy)

Business Owners Policy (BOP)

A policy for businesses that includes general liability and property insurance. It is a bundle that often helps businesses save money.

Certificate of Liability Insurance

A piece of paper that summarizes the most important pieces of information of a policy

Commercial Auto Insurance

An insurance policy that helps protect company vehicles or vehicles used for work


The amount your business will need to pay before the insurance policy covers the remaining balance.

Errors and Omissions Insurance

A policy that will help protect your business in case you face a claim due to negligence or mistakes.

Expiration Date

The date when the policy coverage is finished.

General Liability Insurance

This policy helps protect against lawsuits involving property damage or injuries that have been caused by a third party

Grace Period

The amount of time after a premium is due that the business can still pay without any penalty.


This the compensation you get for a loss.

Insurer or Insurance Company

The entity that sells insurance to your business. They do so by “underwriting”


The responsibility to pay, or perform some other action.

Liability Insurance

This policy helps protect your business against lawsuits regarding your responsibility.


The amount your business pays for coverage

Professional Liability Insurance

Simply another name for errors and omissions insurance

Property Insurance

An insurance policy that helps protect your commercial property if there is an accident or damage.


An estimate made by an insurance company of the cost of coverage and cost of a policy.

Replacement Value

The cost that it would cost to replace an item with a new equivalent.

Retroactive Date of Inception

The date when your errors and omissions coverage beings


This is an additional piece of coverage added onto a larger insurance policy. It may also be called an endorsement

Small Business Insurance

The insurance policy designed to help protect businesses against potential risks and accidents that may occur.

Workers Comp

This policy helps protect employees if they sustain injuries or illnesses on the job

If you ever have any questions regarding your small business insurance policy, then give us a call at The Fulcher Group! We can help you decipher any confusing terminology. We can also help answer any questions regarding a policy and what that policy may cover. After all, it can never hurt to ask!

Original article shared here:

Other Industries and products we specialize in at The Fulcher Group:

Manufacturing Insurance

Preschool & Daycare Center insurance

Automotive Manufacturing Insurance

Tool & Die Shop Insurance

Staffing Agency Insurance

Food and Agriculture Insurance

Freshwater Technology and Services Insurance

Non-Profit Insurance

Cannabis Facility Insurance

Investment Properties – Commercial landlord Insurance

Habitational/Hospitality Insurance

Medical Malpractice Insurance

Elementary and Secondary (K-12) School Insurance

Home Insurance

Condo Insurance

Renters Insurance

Motorcycle Insurance

Watercraft Insurance

Umbrella Insurance

Small Business Insurance

The Fulcher Group offers in Davison, Burton, Flint, Fenton, Beecher, Flushing, Grand Blanc, Goodrich, Swartz Creek, Linden, Mount Morris, Clio, Argentine, Otisville, Lapeer, Genesee, Michigan, and surrounding areas.

329 N State Rd, Davison, MI 48423

(810) 653-2602

  • Grey Facebook Icon
  • Grey Google Places Icon

CA License: 0G47886

We use cookies to personalize and enhance your experience on our site.  Visit our Privacy Policy to learn more. By using our site, you agree to our use of cookies, as well as our Privacy Policy and Terms of Use.