This glossary is intended as a guide not a policy. Always verify your policy for coverages and if you have any question, ask your Insurance Agent or Insurance Carrier. You are always welcome to call Hub Insurance Agency at 361-756-5020 on any of your General Liability concerns.
Admitted Carrier
Insurance company licensed to operate in a specific state and must adhere to state regulations and guidelines. They are backed by state guaranty funds, providing additional security for policyholders.
Aggregate Limit
The maximum amount your insurer will pay for all covered losses during a policy term.
Business Interruption Insurance
Covers lost income and operating expenses if your business is temporarily shut down due to a covered loss (like fire or natural disaster).
Certificate of Insurance (COI)
A document that proves your business has active insurance coverage. Often required when signing contracts or leasing property.
Claims-Made Policy
A type of liability insurance that covers claims made during the policy period, regardless of when the event occurred
Commercial Auto Insurance
Covers vehicles used for business purposes. Includes liability, collision, and comprehensive coverage for cars, vans, or trucks owned or leased by the business.
Commercial Insurance
A broad term that refers to insurance policies designed to protect businesses from potential losses due to property damage, liability, employee-related risks, and more.
Cyber Liability Insurance
Provides protection against losses due to data breaches, hacking, or other cyber-related incidents.
Damage to Rented Premises
Damage to rented premises” coverage, also known as “tenants legal liability,” is a type of property insurance that is included in a commercial general liability insurance policy.
Deductible
The amount you pay out of pocket before your insurance policy covers the rest of the claim.
Business Owner’s Policy (BOP)
A bundled package that typically includes general liability and property insurance. Ideal for small to mid-sized businesses looking for comprehensive coverage at a lower cost.
Each Occurrence/Per Occurrence Limit
A per occurrence limit is the most the insurer must pay for the sum of all damages for any one occurrence.
Employment Practices Liability Insurance (EPLI)
Covers claims related to wrongful termination, discrimination, harassment, or other employment-related issues.
Endorsement (Rider)
A change or addition to an existing policy that modifies coverage, limits, or terms.
Exclusion
Specific events, situations, or types of damage that are not covered by your policy.
Fidelity Bond
Protects your business from losses caused by employee dishonesty, such as theft or fraud.
General Aggregate
It refers to the maximum amount an insurer will pay for all claims during a policy period. Policyholders should review their aggregate limits to ensure adequate coverage for potential risks.
General Liability Insurance
Covers legal costs and damages if your business is sued for bodily injury, property damage, or personal injury (like libel or slander) caused by your business operations.
Indemnity
A promise by your insurer to cover losses or damages incurred due to insured events.
Inland Marine Insurance
Covers property in transit or temporarily located offsite, such as tools or equipment at a job site.
Liability Limit
The maximum amount your insurer will pay for a covered claim under your policy.
Loss Payee
A third party (like a lender or landlord) entitled to receive payment in the event of a claim.
Medical Payments
Medical Payments coverage is part of a general liability policy that offers prompt reimbursement for medical expenses to third parties injured on the insured’s premises or due to their operations, regardless of fault.
Named Perils
Risks that are specifically listed in your insurance policy as being covered, such as fire or theft.
Non-Admitted Carrier
Non-admitted carriers are insurance companies not licensed in Texas. They can offer coverage for risks that admitted carriers may not insure. Policies from non-admitted carriers are not backed by the Texas Guaranty Association. They often have more flexible underwriting guidelines. Premiums may be higher due to the lack of state regulation. Businesses often use non-admitted carriers for specialized or high-risk coverage.
Occurrence Policy
Covers incidents that happen during the policy period, even if the claim is filed after the policy ends.
Open Perils (All Risk)
Covers all perils except those specifically excluded in the policy.
Per Occurrence Limit
The maximum amount your policy will pay for a single claim or incident.
Personal and Advertising Injury
Personal Injury Liability: This covers liability arising from intentional torts, such as libel, slander, wrongful eviction, false arrest, and invasion of privacy. Advertising Liability: This covers liability caused by harms from claims such as misappropriation of advertising ideas, style of doing business, or copyright infringement. Each of these two coverage parts, which are always combined, create a coverage section
that provides businesses with much more coverage than the typical bodily injury
and property damage claims.
Pollution Exclusion
The pollution exclusion eliminates coverage for injuries or damages to a third party resulting from a pollution event arising from your business operations.
Premium
The cost of your insurance policy, typically paid monthly, quarterly, or annually.
Premium Audit
A premium audit is a review your insurance company conducts to make sure you paid the correct premium for your business insurance policy. Your premium is often based on variable factors like payroll, revenue, or subcontractor usage. Premium audits are usually mandatory, meaning they’re part of your insurance contract. Ignoring them can lead to non-compliance fees, estimated premiums, or issues with future coverage.
Products/Completed Operation Aggregate
Refers to the total protection in your general liability insurance policy in cases where your delivered product or completed service causes damage or injury to a customer.
Estimated Premium Deposit/Provisional Premium
Referring to a preliminary premium amount estimated based on available information on your gross revenue, payroll and sub-contracted service at the time of policy inception. Policyholders will be careful not to underestimate these areas to avoid large amounts of premium due in the ending part of their policy term. Refer to “premium audit” above.
Professional Liability Insurance (Errors & Omissions)
Covers claims of negligence, mistakes, or failure to deliver professional services as promised. Especially important for consultants, lawyers, and financial advisors.
Property Insurance
Covers damage on your physical business property—buildings, equipment, inventory—caused by fire, theft, vandalism, or natural disasters.
Risk Management
The process of identifying, assessing, and minimizing risks to your business.
Surety Bond
A contract that guarantees the fulfillment of an obligation—common in the construction industry.
Surplus Lines Insurance
Insurance not available through licensed insurers may be placed with eligible surplus lines insurers. To be eligible to write surplus lines coverage in Texas, the insurer must meet certain requirements and be on TDI’s “eligible list.” Before selling a surplus lines policy, an agent must make a diligent effort to find a licensed insurer to issue the policy.
Umbrella Insurance
Provides additional liability coverage beyond the limits of your other policies, such as general liability or auto insurance.
Underwriting
The evaluation process insurers use to determine your business’s level of risk and calculate your premium.
Workers’ Compensation Insurance
Required in most states, this policy provides wage replacement and medical benefits to employees injured on the job.