Our insurance terms glossary is divided alphabetically by insurance terms in a quick reference guide to assist understanding the language commonly used by insurance companies. Policy documents contain a number of insurance terms because they typically define the limitations of risk and liability on the insured and any exclusions of coverage.
If you plan to start a new policy or renew your current policy with a carrier or agency, it is important to review and understand the policy differences behind individual quotes from multiple carriers. Lower policy premiums may be the result of decreased payout benefits, higher deductibles, or maximum damages allowed. It is important to identify these unique features in any policy comparison, otherwise a lower price may come at a much higher cost when you have to file a claim for loss or damages in the future.
Bailee
An individual or entity who holds property of another. Examples are dry cleaners, jewelers, repairers.
Bailee Insurance
Coverage designed to protect for loss or damage to property of customers regardless of a bailee‘s legal liability. Bailee Insurance is inland marine coverage on property entrusted to the insured for storage, repair, or servicing. It is typically purchased by businesses such as dry cleaners, jewelers, repairers, furriers, etc.
Balance Billing
The practice of a healthcare provider billing you for an outstanding balance after your insurance company has paid its portion of the bill.
Barratry Of The Master
An action of the master of a ship which violates the trust given to him, provided such action is not taken in connivance with the shipowner. Hazard covered in the marine cargo policy.
Basic Form
See Dwelling Property (1).
Basis
An amount attributed to an asset for income tax purposes; used to determine gain or loss on sale or transfer; used to determine the value of a gift (except donations to charities, which generally are recorded at the current value of the asset at the time the gift is made).
Beneficiary
The person or entity designated or provided for by an insurance policy‘s terms to receive any benefits provided by the policy or plan upon the death of the insured.
Benefit Period
A period of time, typically one to three years, during which major medical benefits are paid after the deductible is satisfied. When the benefit period ends, the insured must then satisfy a new deductible in order to establish a new benefit period.
Benefits
The amount payable by the insurance company to a claimant, assignee or beneficiary under each coverage.
Binder
A written or oral contract issued temporarily to place insurance in force when it is not possible to issue a new policy or endorse the existing policy immediately. A binder is subject to receipt of the premium and all the terms of the policy to be issued. It is a legal agreement that serves to effect insurance coverage for a specified period of time until the actual insurance policy can be issued.
Binding Receipt
A receipt given for a premium payment accompanying the application for insurance. If the policy is approved, this binds the company to make the policy effective from the date of the receipt.
Bio-similar Biological Products
A biological product that has no clinically meaningful difference from an existing FDA-approved product.
Blackout Period
The period during which Social Security benefits are not paid to a surviving spouse; between the time the youngest child reaches age sixteen and the widow’s sixtieth birthday.
Blanket Contract
A contract of health insurance affording benefits, such as accidental death and dismemberment, for all of a class of persons not individually identified. It is used for such groups as athletic teams, campers, travel policy for employees, etc.
Blanket Insurance
A policy designed to provide coverage under a single limit for two or more items (e.g., building and/or contents), two or more locations, or a combination of items and/or locations.
Blanket Medical Expense
A provision which entitles the insured to collect up to a maximum established in the policy for all hospital and medical expenses incurred, without any limitations on individual types of medical expenses.
Block Policy
A form of inland marine insurance designed to cover loss to the property of a merchant, wholesaler, or manufacturer including: property of others in the insured‘s care, custody, or control, property on consignment and property sold but not delivered. Common block policies are jeweler’s block and furrier’s block policies.
Blue Cross
An independent, nonprofit membership corporation providing protection on a service basis against the cost of hospital care in a limited geographical area.
Blue Shield
An independent, non-profit membership corporation providing protection on a service basis against the cost of surgical and medical care in a limited geographical area.
Boat Owners Package Policy
A special package policy for boat owners that combines physical damage insurance, medical expense insurance, liability insurance, and other coverages in one contract.
Bodily Injury Liability (BI)
When you are found legally culpable for a car accident, BI coverage pays for the costs associated with injuries to the other people involved. BI also provides coverage for a legal defense if you are sued.
Boiler And Machinery Insurance
Coverage for loss arising out of the operation of pressure, mechanical, and electrical equipment. It covers loss of the boiler and machinery itself, damage to other property, and business interruption losses.
Bond
(1) A certificate issued by a government or corporation as evidence of a debt. The issuer of the bond promises to pay the bondholder a specified amount of interest for a specified period and to repay the loan on the expiration (maturity) date.
(2) A certificate or policy issued by an insurance company guaranteeing performance, fidelity or surety.
Bondholder
A bondholder is the owner of a bond. This can be, and frequently is, different from the person/corporation that purchased the bond. The bondholder is entitled to the proceeds of the bond: in investment terms, principal and interest; in insurance terms, the value the bond supports. For example, a surety bond holder would be entitled to the value that is guaranteed by the surety bond.
Book Of Business
The number, size and type of accounts (policyholders) that an agent services, and upon which he earns commissions.
Branch Office System
Type of marketing system under which branch offices are established in various areas. Salaried branch managers, who are employees of the company, are responsible for hiring and training new agents.
Break In Service
A calendar year, plan year or other consecutive 12-month period designated by the plan during which a plan participant does not complete more than 500 hours of service.
Broad Form Property Coverage Including Completed Operations
Broad Form Property Insurance is a coverage extension to the general contractor. Broad form policies are usually preferable, even though they cost more, because they cover so much. Without Completed Operations coverage, the normal Comprehensive General Liability policy will not cover “completed operations” claims (i.e., claims rising out of work performed on behalf of the insured by subcontractors).
Broadcasters Liability Insurance
The legal liabilities of a broadcaster are numerous and vary from the use of incorrect news stories, libel and slander, invasion of privacy, copyright infringement, and unauthorized use of plot, characters, or music. Broadcasters’ Liability Insurance covers these exposures, as well as defense costs in contesting suits or claims. Employees are covered as insureds while acting within the scope of their duties as such.
Broadened Named Insured
Regarding liability coverages, these coverages will automatically apply to “… any affiliated, associated, allied or subsidiary company or entity (including subsidiaries thereof), now held or hereinafter acquired or constituted…”
Broker
A marketing specialist who represents buyers of property and liability insurance and who deals with either agents or companies in arranging for the coverage required by the customer.
Bronze Health Plan
Bronze plans are a category of coverage offered in the Health Insurance Marketplace. Bronze plans typically carry the lowest monthly premiums and must cover certain services.
Builder’s Risk Insurance
Builders risk Insurance provides coverage to insure building contractors for damage to property under construction. The completed value form requires a 100% coinsurance because insurance value purchased must equal the completed value of the structure. The reporting form type of coverage allows coverage to be carried according to the stage of completion of the structure. Perils insured against are fire, lightning, vandalism, malicious mischief, the types of risks common to a builder’s site. Smoke, sprinkler leakage, water damage, windstorm, and hail are also usually covered.
Burglary
Breaking and entering into another person’s property with felonious intent.
Burglary And Theft Insurance
Coverage against property losses due to burglary, robbery, or larceny.
Business Income Insurance
A standard element of commercial property insurance providing coverage against loss of operating income due to fire, explosion, or other insured perils. Generally takes the limited form of business interruption insurance, but can be broadened through the addition of indirect loss, consequential loss, extra expense, and other coverages.
Business Insurance
A policy which primarily provides coverage of benefits to a business as contrasted to an individual. It is issued to indemnify a business for the loss of services of a key employee or a partner who becomes disabled.
Business Interruption Insurance
Business Interruption insurance, covers the loss of earnings as a result of damage or loss of business property. Reimbursement for salaries, taxes, rents, and other expenses, even net profits that would have been earned during the period of interruption can be included.
Business Life Insurance
Life insurance purchased by a business enterprise on the life of a member of the firm. It is often bought by partnerships to protect the surviving partners against loss caused by the death of a partner, or by a corporation to reimburse it for loss caused by the death of a key employee.
Business Owner’s Policy
Business insurance that combines protection from liability and property risks in one package. Typically purchased by small to medium sized businesses.
Business Personal Property
Movable property owned by your business. Typically includes office supplies, machinery, computers, furniture and everything else excluding the building.
Buy-Sell Agreement
An agreement made by the owners of a business to purchase the share of a disabled or deceased owner. The value of each owner’s share of the business and the exact terms of the buying-and-selling process are established before death or the beginning of disability.
Don’t see an insurance term listed here? Chat with us below or ask Customer Service for assistance.
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