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When it comes to arranging your insurance as a small business, you may come across some terms you’ve not heard of before. At Everywhen, we’re dedicated to making the complex simple and talking about insurance in a way that everyone can understand.
Act of God A natural event that is beyond human control. For example, flooding or a storm. | Loss adjuster The person who determines how much money should be paid when someone has made a claim on their insurance policy. |
Aggregate limit A cap on the total amount an insurer will pay out over the duration of your policy. | Material damage |
All risks A type of insurance that automatically covers any risk not specifically excluded in the policy wording. | Moral hazard When the person who is insured takes more risks than usual because they believe any repercussions will be covered by their insurance. |
Certificate of insurance A document issued by your insurer that provides evidence of your insurance coverage. | Premium The amount you pay for your insurance. This is usually paid for on an annual basis, or in instalments. |
Claims-made policy A policy that covers claims for events that happened before the policy started. This will be within an agreed timeframe. | Risk appetite The level of risk an insurer will accept when offering cover. For example, a home insurer may have a low-risk appetite for properties in high flood risk areas, meaning they can refuse cover or charge higher premiums. |
Claims-occurring policy If your policy is written on a claims occurring basis, it will only pay out for claimable incidents that happened within the duration of the policy. | Subrogation When an insurer recovers their costs from a third party responsible for the loss. This is common in car insurance when a car accident is caused by another driver. |
Endorsement Any change or addition to the terms of your policy. This can happen before you take out the policy, after you have been insured or at the policy’s renewal. | Sums insured The maximum amount an insurer will pay out in the event of a claim. For example, in home insurance this would be the total cost to rebuild your property including material and labor. |
Excess A change to a policy that can modify, increase or restrict coverage to better suit the policyholder’s needs. This can happen throughout the duration of your policy and at renewal. | Underwriting The process that insurers go through when deciding whether to offer cover, how much it should cost and what terms to apply. |
Exclusion A specific condition, risk or type of loss that your policy does not cover. These should be listed in your policy wording. |
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.
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