Additional Insured

An individual or entity that is not automatically included as an insured under the policy of another, but for whom the insured’s policy provides a certain degree of protection.   The named insured’s may want to add additional insured status to others because they want to protect the other party because of a close relationship with that party (e.g. employees or members of an insured club) or to comply with a contractual agreement requiring the named insured to do so (e.g. customers or owners of property leased by the named insured.)

Additional Named Insured

An individual or entity, other than the first named insured, identified as an insured in the policy declarations or an addendum to the policy declarations.
An individual or entity that is added to a policy with the status of named insured after the policy is written.  Such an individual or entity would have the same rights and responsibilities as an individual or entity names as an insured in the policy declarations other than those rights and responsibilities reserved to the first named insured.

Accounts Receivable Coverage

This coverage provides protection for the following losses:

All sums due you from customers, providing you are unable to collect because of a direct result or loss or damage to records of accounts receivable.
Interest charges on any loan to offset impaired collections pending repayment of such sums made uncollectible by such loss or damage.
Collection expense in excess of normal collection cost made necessary because of such loss or damage.
Other expense, when reasonably incurred by you in re-establishing records of accounts receivable following loss or damage.

Actual Cash Value

Actual cash value is the replacement cost of property minus a deduction for depreciation.  Actual cash value cannot exceed the applicable limit of liability shown in the declarations of the policy nor the amount it would cost to repair or replace such property with material of like kind and quality within a reasonable amount of time after a loss.

Additions or Alterations

This coverage protects any additions, alterations, and improvements you make to your rented or leased unit for up to 10% of your contents limits.  The amount of coverage can be increased.

Advertising Injury Liability

Advertising injury means injury rising out of an offense committed in the course of your advertising activities.  If such injury rises out of libel, slander, defamation, violation of right of privacy, piracy, unfair compensation or infringement of copyright, title or slogan.


The limit the insurance policy will pay for all covered losses sustained during a specified period of time, usually one year.

Agreed Amount Endorsement

An agreement made by the insurance company where it waives the co-insurance clause on the specified property. If this endorsement is added to a policy, there would be no coinsurance penalty at the time of a claim.

Bailee Coverage

Coverage on property entrusted to the insured for storage, repair, or servicing.

Blanket Insurance

Blanket insurance provides 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.


A binder is a legal agreement that serves to effect insurance coverage for a specified period of time until the actual insurance policy can be issued.  A binder can be issued by either an insurance agent or company and must provide the following information:

Name of insured
Type of insurance coverage
Limits of insurance
Covered perils
Name of insurance company

Boiler and Machinery Coverage

A policy that protects the insured against catastrophic property loss due to steam boiler explosion or breakdown of machinery and equipment.

Broad Form Property Damage Coverage Including Completed Operations

This is a coverage extension that is mainly used for general contractors in respects to completed operations property damage liability claims. A normal policy will not cover completed operations claims arising from work performed on behalf of the insured by subcontractors.  If this coverage extension is on the policy there would be coverage.

Builder’s Risk Policy

Coverage for loss of or damage to a building under construction.  The policy is generally for a specified period of time and applies in the course of construction.  Once the building is constructed a property policy should be written for coverage.

Business Income Coverage

If the insured suffers a business interruption and has to close or operate at a reduced level because of a covered loss, this coverage will replace your operating income during the period of restoration up to your policy limits.  Business income is the sum total of net profit, payroll expense, taxes, interest, rents, and any other expenses earned by the business. This coverage can be set up on a monthly limitation basis, coinsurance basis, actual loss sustained, etc.

Completed Operations Liability Coverage

This type of liability insurance provides coverage for bodily injury and property damage rising from completed or abandoned operations, provided the incident occurs away form the premises owned or rented by the insured. Operations are deemed completed when all operations to be performed by or on behalf of the insured under contract have been completed or all operations at the site have been completed.

Commercial General Liability

Coverage for bodily injury and/or property damage that the insured is legally liable to pay and is a covered occurrence.

Consequential Loss or Damage

Consequential loss or damage is indirect loss or damage resulting from loss or damage caused by a covered peril, such as fire or windstorm.  In the case of loss caused where windstorm is a covered peril, if a tree is blown down and cuts electricity used to power a freezer and the food in the freezer spoils, if the insurance policy extends coverage for consequential loss or damage then the food spoilage would be a covered loss.  Business interruption insurance extends consequential loss or damage coverage for such items as extra expenses, rental value, profits and commissions, etc.

Contractors Liability

Insurance to cover sums that the insured becomes liable to pay as damages resulting from bodily injury and/or property damage which was caused from an insured peril. Coverage is provided for premises/operations and completed operations. Premises/operations is for claims rising out of the ownership, maintenance, or use of premises and your operations in progress. Completed operations is coverage for possible liability for bodily injury and/or property damage after your work is complete.

Contractual Liability Coverage

In construction and other agreements either written or oral, it is common for one party to assume the liability of another, e.g. contractors working for the owner of the project will assume the liability for the owner in relation to the project they are completing for the owner.  This is also referred to as a “hold harmless” agreement.

Debris Removal

This coverage pays for the insured’s expenses to remove debris of covered property caused by a covered cause of loss.  This does not include pollutants and must occur during the policy period and be reported within 180 days of the occurrence.

Directors and Officers Liability Coverage for Non-Profits

Coverage for directors, officers, and trustees if a lawsuit is brought against them for:

Wrongful termination
Sexual harassment
Promotions and compensation
Interference with employment contract
Hiring decisions
Conflicts of interest
Libel, slander and defamation of character
Failure to supervise employees
Invasion of privacy
Copyright infringement
Donors who feel that their contributions have not been used to further the expressed aim of the organization
Board members who disagree with a majority decision on the use of funds
Beneficiaries who feel they are entitled to more than they received
State attorney generals who institute legal proceedings against the board for issues such as  mismanagement of funds and antitrust violations
Electrical Data Processing Coverage

A standard policy provides some coverage for electronic data processing equipment but it is generally for prepackaged software programs on an actual cash basis and is limited to replacement with blank tapes or diskettes plus transcribing expense. EDP coverage extends special perils coverage plus coverage for all electrical and magnetic damage, mechanical breakdown and often temperature and humidity changes. It may also cover the extra expense or income loss from the loss of EDP equipment, programs, and data.   Media coverage includes the cost to reconstruct software developed in-house.

Fire Legal Liability

Coverage needed if you occupy leased or rented property for which you could be held legally liable for damage to the property due to fire or explosion.

Forgery or Alteration Coverage

Coverage for losses sustained through forgery or alteration of outgoing negotiable instruments made or drawn by the insured or drawn on the insured’s account or made or drawn by one acting as your agent.  This includes loss caused by any of the following:

Checks or drafts made or drawn in your name, payable to a fictitious entity
Checks or drafts, including payroll checks executed through forged endorsements
Alteration of the amount of a check or draft

Garagekeepers Legal Liability

Provides coverage to owners of storage garages, parking lots, repair garages etc for liability as bailees for which damage was caused by the insured to an automobile left in their custody for storage, repairs servicing, or parking. 

Inland Marine Coverage    (No this is not watercraft coverage!!)

Coverage for moving or moveable property such as tools, equipment, furs, jewels etc.

This coverage is an outgrowth of ocean marine insurance.  Historically ocean marine insurance held the transporter of the moveable property responsible for the goods before, during, and after the voyage. This type of coverage was later extended to include the transporting of moveable property over land.  These inland marine policies became known as”floaters” since the property to which the coverage was extended was moving or”floating “

Medical Payments - General Liability

A general liability coverage in which there is coverage for the insured and others for medical and funeral expenses incurred by such persons as a result of bodily injury or death sustained by accident under the conditions of the policy.  Payment by the insurance company is made without regard to the insured’s liability.

Occurrence   (Under Commercial General Liability)

Occurrence means an accident which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.

Ordinance or Law Coverage


Coverage for loss to undamaged portion of the building pays for the loss of value of an undamaged portion of the existing building which must be demolished and/or removed to conform to local or state ordinances.

Demolition cost pays for the cost of demolition of the undamaged parts of the building that are necessitated by the enforcement of the building, zoning, or land use ordinance or law.

Increased cost of construction pays for any increased costs incurred to replace the building with a new one that meets the building laws or ordinances or to repair the damaged building so that it meets the specifications of current building laws or ordinances.

Owners or Contractors Protective Liability Coverage

Provides payment for the insured of all damages the insured becomes legally obligated to pay due to bodily injury or property damage caused by an occurrence rising from operations performed for the named insured by independent contractors or acts or omissions of the named insured in connection with their general supervision of such operations.

Pesticide or Herbicide Applicator Coverage

When it is the business of the named insured to apply pesticide or herbicide products, this coverage gives the named insured coverage where there is a sudden and accidental, release of vapor, fumes or any other toxic chemical from the product being used.  If the operations of the named insured are being conducted away from the premises that is owned by or rented to the named insured and the bodily injury or property damage occurs away from such premises, and if such operations meet all standards of any statute, ordinance, regulation or license requirement of any federal, state or local government having application to such operation.

Pollutant Cleanup and Removal

This is an aggregate first party coverage that applies to your expense in extracting “pollutants” from land or water at your location, if the release of the pollutants is caused by or results from a covered loss.

Pollution Legal Liability Coverage

Pays for all sums that you are legally obligated to pay as a result of emission, discharge, release, or escape of any contaminants, irritants, or pollutants into or on land, the atmosphere, or any water course or body of water, provided this results in “environmental damage”.  It also pays for reimbursement of your expense for reasonable and necessary cleanup costs incurred in the discharge of a legal obligation imposed through governmental action provided that the expense is incurred because of environmental damage.  This coverage pays for defense of any claim or suit that is the subject of this insurance.

Products Liability

The liability for bodily injury or property damage incurred by a merchant or manufacturer as a consequence of some defect in the product sold or manufacturered.  Completed operations liability provides coverage for a contractor after he has completed a job as a result of improperly performed work

Products and Completed Operations Aggregate

Liability arising out of the insured’s products or business operations conducted away from the insured’s premises once those operations have been completed or abandoned.  An aggregate limit in an insurance policy stipulates the most it will pay for all covered losses sustained during a specified period of time, usually one year./

Rent Insurance

This coverage protects the building owner against loss of income when rentals have been interrupted or rental value has been impaired by the occurrence of any of the insured perils.  Basically this is business interruption insurance for the landlord.

Theft, Disappearance, and Destruction of Money and Securities Coverage

This provides coverage for loss of money and securities resulting directly from theft, disappearance or destruction.  It applies while the money and securities are on the insured’s premises or the messenger while conducting business at the bank and while off the insured’s premises in the custody of the insured or the insured’s messenger.

Transit Coverage

Coverage of the insured’s property while in transit over land from one location to another.

X, C, and U Exclusions

Explosion (X) hazard includes damage arising out of blasting or explosion.

Collapse (C) hazard includes structural property damage and property damage to any other property caused by grading of land, excavating, burrowing, filling or backfilling, tunneling, pile driving, coffer dam, caisson work, moving, shoring, underpinning, razing, or demolition of any building or structure.

Underground (U) damage includes damage to wires, conduits, pipes, mains, sewers, tanks, tunnels, or any similar property beneath the surface of the ground water caused by and occurring during the use of mechanical equipment for the purpose of grading land, paving, excavating, drilling, backfilling, filling, or pile driving.