Commercial insurance can be hard to wrap your head around, especially if you’re new to owning a business. But that’s what we’re here for—to make things easy for you.

We’ve compiled a list of the most common insurance terms and phrases, and briefly explained what they’re about. If you have any questions, reach out to us—we’re just a phone call or email away.



These are the most common insurance terms you’ll come across.

Certificate of insurance: A certificate proving that a contractor or small business has an insurance policy, along with key details about and conditions of the policy (it may include liability, errors & omissions, etc.). A landlord, customer or client may ask you to furnish this before they allow you to work on their property or handle their possessions. Your insurance broker can prepare this for you when needed.

Claim, claimant: A formal notice to an insurer, stating that you or your business experienced financial loss or damage that you are covered for, and that you are now requesting payment. The person or entity submitting the claim is the claimant; in case of a general liability or professional liability claim, the claimant would be the party suing you or your business.

Comprehensive: In the context of business insurance, a comprehensive coverage includes policies that protect your business against a broad range of risks.

Coverage, cover: The amount of quantifiable protection that an insurance company provides you or your business, specifying certain risks and liabilities, in return for a premium that you pay your insurer. This agreement, along with all the specifics and details, is provided in a contractual document called a policy. You can often choose higher or lower coverage, depending on the risks you face (higher coverage usually results in higher premiums).

Deductible: The amount of money that you are responsible for paying (out of your own pocket) to cover your loss before your insurer provides coverage. When drawing out your contracts, you and your insurer will agree upon a deductible for each type of policy. Usually, a higher deductible means lower premium costs.

Endorsement: Any addition or removal of coverage made by you. Also see rider.

Exclusions: A clause or term in your policy that specifies risks or liabilities that are not covered by your insurer. You will want to review these carefully with your broker.

Insurance adjuster: The person (or people) who investigates claims, evaluates damages and estimates settlement costs that an insurer will pay you for loss. Also known as a claims adjuster.

Liability: Responsibility for a loss, both financial and personal. If your business operations cause any third-party damages and/or bodily injuries, your business is usually liable to pay expenses or compensation. Most insurance policies cover a wide range of business liabilities.

Loss: A loss can be financial or personal; it is the basis of the claim that you submit to your insurer. A third party can also claim loss caused by your business and seek compensation from you.

Policyholder: The person or business entity that owns, controls and is covered by a policy. This is usually the named insured.

Premium: The amount that you and your business pay regularly to your insurer to maintain your insurance contract and be protected against risks. A premium varies from policy to policy and is influenced by many factors. Also see grace period.

Quote: An estimated cost for what you will pay your insurer, specifying coverages that you need for your business. You (or your insurance broker, such as Boardwalk) can request quotes from multiple insurers to compare and make the best decision. Request a quote now.

Risk: A likelihood that something might go unexpectedly wrong. An insurance policy helps you protect your business against common risks.

Underwriter: A specialist or a team, representing an insurer, that assesses your business and determines if they will insure you, and how much it will cost.

Write-off: If your insurer estimates the cost to repair a damaged commercial vehicle and deems it not worth repairing, it is called a write-off.



These are some insurance terms and policy-related terms that your broker might use when talking with you. These also include terms that you’ll see on your policy document.

Actual cash value: The current value of an insured item, used when calculating commercial property claims. Actual cash value is determined by current market value, depreciation and productive life left at the time of loss or damage. It is usually calculated as depreciation subtracted from replacement cost.

Additional insured: Refers to the additional individual(s) or groups of individuals who are covered by an insurance policy, other than the policyholder (the named insured). It extends the current policy you hold to include a third party; an additional insured does not typically pay a premium and cannot manage the policy.

Aggregate limit: The maximum amount your insurer will pay out for losses covered by the policy during the policy period (usually one year). This is different from the maximum amount per single claim (a value known as the per-occurrence limit). If your total claim exceeds the aggregate limit, you will need to pay the difference.

Appraisal: Your insurer will conduct an appraisal (either by hiring professional evaluators or using their own team) to determine the value of your insured asset and estimate repair or replacement costs. This is commonly done when you apply for a commercial property or business owners’ policy.

Arbitration: An insurer might suggest this as a cheaper and faster alternative to settle business disputes, rather than going to court. In this legally binding process, a neutral third party (an individual or a panel) is hired to pass a judgment after considering the facts of the case.

Binder: Also called an insurance binder, this is a temporary contract between your insurer and your business. It serves as proof of insurance coverage and is usually required when buying commercial property or commercial vehicles. Your broker can help you prepare this.

Blanket insurance: A property insurance policy that insures more than one type of property at a single location, or the same type of property at multiple locations, or multiple types of properties at multiple locations. Blanket insurance is less limiting than specific property coverage, and especially useful if your business owns and has similar operations in multiple locations (like restaurant chains or apartment complexes).

Care, custody and control: Usually used in the context of general liability or commercial auto policies. This is an exclusion clause that does not provide coverage if property owned by someone else (e.g., customers’ coats at your business’s coat-check desk, a cleaning machine on rent, a customer’s watch being serviced by you, or real estate property while vacant and under renovation) is damaged while in your temporary care (i.e., leased to you), custody (i.e., on your premises) or control (i.e., while being used or operated by you).

Coinsurance: This clause refers to when your insurer requires you to purchase coverage for a certain percentage of your property’s value to avoid a penalty at the time of claiming a loss. Coinsurance is usually imposed to ensure you have adequate coverage when you do make a claim.

Continuity date: The earliest date from which your business has maintained continuous coverage, whether with your current insurer or a previous one. When you drop coverage and take the next policy after a gap, the new continuity date will be the start date of this policy. Your insurer will pay for claims on incidents that occurred after this date. Usually relevant for policies like errors and omissions and directors and officers.

Extended reporting period (ERP): An add-on feature for certain policies that allows you to report a claim even if your policy has expired—as long as the incident occurred during the policy period. This is mainly applicable to policies like errors and omissions or professional liability, and can be for a period of 30 to 60 days (basic ERP) or longer. Also known as tail coverage.

Extra expense coverage: Helps pay for additional expenses to keep your business operations running while recovering from a disruption or loss to property. It only activates after property replacement or repair expenses, which are covered by your commercial property policy. It can include temporary relocation costs, payroll, utilities, etc.

Grace period: The additional amount of time your insurer gives you to pay your insurance premium. A grace period, usually 30 days, ensures that you don’t lose your coverage if you didn’t pay by the premium due date.

Named insured: The person, people or business entity listed on the commercial insurance policy, and to whom the policy or coverage applies to; usually the ones who are paying the premium and are able to manage the policy.

Nose coverage: An add-on feature for certain policies that allows you to report a claim for an incident that occurred on a previously terminated policy (even if under another insurer). Applicable to policies such as professional liability, where your current policy would cover for incidents occurring during the policy period.

Peril: Any hazardous event—fire, storms, theft, etc.—that could cause damage to property, goods, belongings or building contents. A named peril policy would cover perils specified in the policy, whereas an open peril policy is typically broader (but with exclusions).

Replacement cost: The amount it will cost to replace your damaged or stolen property. This is used in context of determining how much your insurer has to pay out when you make a claim, usually factoring in actual cash value and depreciation.

Rider: A rider adds extra protection to a policy at the cost of a higher premium. It modifies a basic insurance coverage to include additional risks, allowing you to customize your coverage to specifically what you need. Also known as a business endorsement.

Tail coverage: Also known as an extended reporting period, it is an add-on feature for certain policies that allows you to report a claim even if your policy has expired—as long as the incident occurred during the policy period. This is mainly applicable to policies like errors and omissions or professional liability, and can be for a period to 30 to 60 days or longer.

Tort, tortfeasor: A wrongful act that causes someone damages or bodily injury, leading to quantifiable personal or financial loss; a tortfeasor is an individual or a business entity that commits such an act. A tortfeasor is liable to pay the affected party; many commercial policies cover you for expenses arising from this.

Umbrella: Used in context of business insurance, an umbrella policy provides additional coverage when you’ve reached your policy limit or require higher limits. It applies to most policies, including general liability, commercial auto, employers liability, etc.




Here’s a list of policies relevant to business owners. These are brief definitions touching on what each one might generally cover—be sure to talk with us about what your business specifically needs.

Builders risk insurance: Also known as course-of-construction coverage, this protects buildings or structures under renovation or construction from damages-related expenses. This property policy, usually taken by the property owner, can include equipment, materials, supplies and labour costs.

Business interruption insurance: Also called business income insurance, this policy helps you replace income lost due to property damage (like fire, storms, etc.). This insurance covers operating expenses, payroll or monthly bills until your business can reopen. Usually included in a business owners policy.

Business owners policy: This insurance bundles commercial property and business liability insurance into one, covering a range of claims from theft to fire damage, as well as claims of third-party injury or damage caused by your business’s operations.

Business personal property: Covers repair or replacement of items owned by your business, including equipment, furnishing, inventory, stock, supplies and materials. Also known as business contents insurance, it is usually included in commercial property insurance.

Commercial auto insurance: Protects your business-owned vehicles from expenses in cases of damages, third-party injuries, collision, theft or vandalism. This insurance is essential if your business operates vehicles or if vehicles are registered under your business’s name.

Commercial property insurance: Protects property that your business owns, leases or operates out of, and includes exterior fixtures as well as interior contents. A key policy, it helps with expenses arising from damage by fires, theft, lightning, vandalism, etc.

Directors and officers liability insurance (D&O): Protects directors, officers and other important decision-makers of your business, providing for expenses arising from lawsuits or claims when customers sue for wrongful acts. This can help pay for settlement costs, legal fees and other case-related expenses.

Employers liability insurance: Protects your business by providing funds for expenses if your employee sues the business in case of work-related injuries or illness. This covers costs that are not covered under workers’ compensation insurance.

Equipment breakdown coverage: Taken in addition to a commercial property insurance, this insurance covers your business’s mechanical equipment for repair or replacement costs in the event of accidental malfunction. Costs covered can include power surges, short circuits, loss of air pressure, mechanical breakdowns and more.

Errors and omissions (E&O): Essential for contractors, freelancers and other small businesses providing professional services, this can help protect you when customers claim negligence, errors, omissions, inaccurate advice or dissatisfaction with your service. It covers legal costs, settlements and associated administrative fees. Also known as professional liability insurance.

Floater coverage: This policy can be added as a rider to cover property, equipment, tools and products that are movable or in transit, such as lawnmowers for a gardening contractor, company laptops, construction tools for builders, etc. While most insurance would cover assets that remain within the insured property, a floater is essential if you travel with it, especially if you are a contractor.

General liability insurance: The most common type of commercial insurance, this provides for costs when your business is sued for property damage, bodily injuries, libel or slander caused by your operations. Also known as commercial general liability (CGL) or business liability insurance.

Hired and non-owned auto insurance: If your employees use their own vehicles for business purposes, or if your business rents or leases vehicles for business use, this insurance provides auto coverage to protect you from costs of injuries, collisions and damages. Most commercial auto insurance policies don’t cover leased or hired vehicles, and this policy covers the gap.

Host liquor liability insurance: When your small business is hosting a social event that includes use of alcohol (either provided by your company or allowing guests to bring their own), you’ll need this one. It covers expenses and liabilities from alcohol-related incidents, including property damages and third-party injuries.

Liquor liability insurance: Any establishment that serves alcohol requires this coverage for defence costs and settlements arising from alcohol-related incidents, including property damages and third-party injuries. Most insurers exclude this from their general liability wordings, so have your broker confirm that it is included.

Professional liability insurance: Similar to errors and omissions. Essential for contractors, freelancers and other small businesses providing professional services, this can help protect you when customers claim negligence, errors, omissions, inaccurate advice or dissatisfaction with your service. It covers legal costs, settlements and associated administrative fees.

Small business insurance: This coverage can significantly help a small business recover from expenses arising from natural disasters, professional errors, third-party injuries and property damages that occur during regular course of operations. It is usually a bundle that includes policies such as workers’ compensation, commercial auto, E&O and more.

Workers’ compensation insurance: This can help compensate your employee for medical expenses and lost wages related to an injury or illness caused during business operations. It is usually legally mandated if you hire employees and includes employers liability insurance.

Who is Boardwalk Insurance?

We’re specialists in small-business insurance. We’ve built technology to provide a better way to get the financial security your business deserves—quickly and painlessly, on your schedule.

Boardwalk Insurance runs on a policy management system that is entirely our own and free from any third-party limitations. From finding a plan that best fits your needs and budget to managing your policy after your purchase, our tech is here to help.

Find out more about how Boardwalk Insurance can help you get the right coverage at the most competitive price: visit