People & market terms

Administrative Services Only (ASO)

An arrangement where an employer self-funds its benefit plan but pays a third party only to administer it.

Also: ASO · a/s/o · administrative services only arrangement

Admitted vs Non-Admitted Carrier

Admitted carriers are state-regulated and backed by the guaranty fund; non-admitted (surplus lines) carriers offer more flexibility but without that safety net.

Also: Admitted Carrier · Surplus Lines Carrier

AM Best Financial Strength Rating

A letter grade indicating an insurance carrier's financial strength and ability to pay claims.

Also: AM Best Rating · Best Rating

Asset Risk

Asset risk is the risk that the value of an insurer's or a company's invested assets falls, leaving it unable to meet its obligations.

Also: asset risk meaning · asset risk in insurance

Binder

A temporary agreement providing coverage until your full policy is issued.

Bordereau

A detailed schedule of premiums or losses that one party reports to an insurer or reinsurer.

Also: bordereau meaning · bordereaux · premium bordereau · loss bordereau

Broker of Record

The broker or agency you formally authorize to service your policy with a given carrier—changed by signing a Broker of Record letter.

Also: BOR · Agent of Record · AOR · Broker of Record Letter · BOR Letter

Broker vs Agent

A broker represents you; an agent represents the insurance company.

Also: Insurance Broker · Insurance Agent

Carrier / Insurer

The insurance company that underwrites and pays claims on your policy.

Also: Insurance Company · Insurance Carrier

Commercial Lines

Commercial lines refers to insurance products sold to businesses, as opposed to personal lines sold to individuals.

Also: commercial insurance · business lines

Directors and Officers Insurance (D&O)

Coverage that protects a company's founders, directors, and officers personally when they are sued for decisions made running the business.

Also: D&O · D&O insurance · directors and officers liability · management liability

Domestic Insurer

A domestic insurer is an insurance company chartered and domiciled in the same state where it is doing business.

Also: domestic insurance company · domestic carrier

Employee Benefits Program

An employee benefits program is the set of non-wage benefits, such as health, retirement, life, and disability coverage, that a company offers its employees.

Also: employee benefits program · employee benefits plan · benefits package

Employers' Liability Insurance

The part of a workers' compensation policy that covers employee-injury lawsuits falling outside the no-fault workers' comp system.

Also: employers liability · Coverage B · EL insurance

Employment Practices Liability Insurance (EPLI)

Coverage that protects a company against claims by employees alleging wrongful employment practices such as discrimination, harassment, or wrongful termination.

Also: EPLI · employment practices liability · EPL insurance

Errors and Omissions Insurance (E&O)

Coverage that pays to defend and settle claims that your professional work, product, or service failed a client or caused them a financial loss.

Also: E&O · E&O insurance · professional liability · errors and omissions

Express Authority

The specific power an insurance agent is explicitly given, in writing, to act on an insurer's behalf.

Also: express authority insurance · express authority meaning · agent express authority

Fidelity Bond

Coverage that protects a business against financial losses caused by dishonest acts of its own employees, such as theft, fraud, or embezzlement.

Also: Employee Dishonesty Coverage · Fidelity Coverage · Commercial Crime Bond

Fiduciary Liability Insurance

Coverage that protects the people who manage a company's employee benefit plans from personal liability for how those plans are administered.

Also: fiduciary liability · fiduciary insurance · ERISA fiduciary coverage

Financial Strength Rating

A rating that measures an insurer's ability to meet its financial obligations.

General Liability Insurance (GL)

Core business insurance that covers third-party bodily injury, property damage, and personal/advertising injury claims.

Also: GL · CGL · Commercial General Liability · GL Insurance

General Partner Liability (GPL)

General Partner Liability (GPL) is management-liability coverage that protects a venture capital or private equity firm, its partners, and its management company against claims arising from how they run their funds and make investment decisions.

Also: general partner liability · GPL insurance · general partnership liability · VC management liability

Indemnity

The obligation to compensate someone for their loss or damage.

Indemnity Bond

A surety bond that guarantees one party will be reimbursed for a loss if the party who bought the bond fails to meet an obligation.

Also: indemnity bond meaning · what is an indemnity bond · indemnity bond vs surety bond

Inland Marine Insurance

Coverage for movable business property and equipment while it is in transit or away from your main location.

Also: Inland marine · Floater · Equipment coverage

Insurable Risk

An insurable risk is a pure, measurable risk of accidental loss that an insurer is willing to cover in exchange for a premium.

Also: what is insurable risk · insurable risk meaning · insurable vs uninsurable risk

Insurance

A contract where an insurer agrees to pay for covered losses in exchange for a premium.

Insured

The person or entity protected by an insurance policy—typically your company (the named insured) plus officers, directors, employees, and any additional insureds added by endorsement.

Also: Insured Party · Covered Party · Policyholder

Key Person Insurance

Life (and sometimes disability) insurance a company buys on a founder or critical employee, with the company as beneficiary, to survive their loss.

Also: key person life insurance · key man insurance · keyman insurance

Management Liability Insurance

Management liability insurance is the umbrella category for the executive-risk lines a company buys together, typically D&O, EPLI, fiduciary liability, and crime/fidelity coverage, often packaged into a single program.

Also: management liability · management liability coverage · ML insurance

Media Liability Insurance

Media Liability Insurance is specialized professional (E&O-style) coverage for content-related claims, such as defamation, copyright or trademark infringement, and invasion of privacy, arising from a company's publishing, advertising, broadcasting, or digital content.

Also: media E&O · media liability coverage · media insurance

Named Insured

The specific entity listed on the policy as the primary policyholder—with the broadest rights of any insured.

Obligee

The party that a surety bond protects, meaning the one who requires the bond and can make a claim on it if the principal fails to perform.

Also: what is obligee · obligee meaning · obligee vs principal

Organizational Risk

Organizational risk is the risk that arises from how a company is run: its leadership, people, processes, and governance.

Also: organizational risk management · organizational risk examples

Principal (Surety Bonds)

In a surety bond, the principal is the party that buys the bond and is primarily responsible for performing the guaranteed obligation.

Also: who is the principal in insurance · principal meaning surety · principal vs surety

Product Liability Insurance

Coverage that protects your business when a product you make, sell, or distribute causes bodily injury or property damage to a third party.

Also: Products Liability Insurance · Product Liability

Proposal

A summary document from your broker presenting one or more quote options.

Quote

A carrier's offer to provide coverage at a specific price and terms.

Rebating

Rebating is the largely illegal practice of an agent or broker giving a customer cash, gifts, or part of their commission as an inducement to buy or renew a policy.

Also: what does rebating mean · insurance rebate · anti-rebating law

Redlining (Insurance)

Redlining in insurance is the illegal practice of denying or overpricing coverage based on the location or demographics of an area rather than the applicant's actual risk.

Also: redlining in insurance · insurance redlining

Reinsurance

Insurance that insurance companies buy to protect themselves from large losses.

Retrocession

Retrocession is the reinsurance that reinsurers buy to pass on a portion of the risk they have already assumed.

Also: retrocessionaire · reinsurance of reinsurance

Risk

The possibility of financial loss from an uncertain event.

Risk Reduction

Risk reduction is any action that lowers the likelihood or severity of a loss before it happens.

Also: loss control · risk mitigation

Risk Retention Group

A member-owned liability pool authorized under federal law — not a traditional insurance carrier, and typically not AM Best-rated, which means its policies may not satisfy enterprise or government contract requirements.

Also: RRG · member-owned risk pool

Risk Sharing

Risk sharing spreads the cost of a potential loss across multiple parties instead of placing it all on one.

Also: risk sharing meaning · risk pooling

Risk Transfer

Shifting financial responsibility for a risk from one party to another.

Speculative Risk

Speculative risk is a risk that can end in either a gain or a loss, which is why insurance generally will not cover it.

Also: speculative risk meaning · speculative vs pure risk

Surplus Lines

Insurance placed with non-admitted carriers for risks that admitted carriers won't cover.

Tech Insurance

A bundle of coverages technology companies typically carry — usually Tech E&O, Cyber, General Liability, and D&O — rather than a single standalone policy.

Also: Technology Insurance · Insurance for Tech Companies · Startup Tech Insurance

Technology Errors and Omissions (Tech E&O)

Professional liability built for technology companies, covering claims that your software, platform, or tech services failed or caused a client a loss.

Also: Tech E&O · technology E&O · technology professional liability

Tertiary Beneficiary

A tertiary beneficiary is the third-in-line recipient of a policy's death benefit, paid only if both the primary and secondary beneficiaries cannot collect.

Also: what is a tertiary beneficiary · third beneficiary · third contingent beneficiary

Underwriting Risk

Underwriting risk is the risk an insurer takes on that the premiums it collects will not cover the claims and expenses on the policies it writes.

Also: underwriting risk meaning · underwriting risk in insurance