Business Insurance Terms Every Entrepreneur Should Know

From the experts at Zensurance

Purchasing business insurance should not be painful. However, to make a fully informed decision, you are sometimes required to read through long policies and pages of exclusions. By learning the basics and understanding some of the common insurance industry languages, you can ask the right questions of your insurance provider and feel confident that you have made an informed decision. Here are 5 business insurance terms you need to know:

Certificate of Insurance

Also known as proof of insurance, a Certificate of Insurance is a one-page document issued by your broker summarizing the important details of your policy. You will often be asked for this when you are getting office space, signing a new contract, or getting a loan.


A deductible is the amount of money you, as the insured, pay in an insurance claim before your insurance coverage kicks in. After you’ve paid the deductible, your insurance company will pay you for the remainder of the claim value (up to policy limits, of course). You can adjust the deductible amount in your policy, and the higher it is, the lower your premium will be.


An exclusion is a statement in your policy that outlines which your policy does not cover conditions or risks. Insurance agreements can be very broad, so exclusions are used to clarify the exact scope of your policy.

Business Owner’s Policy (BOP)

A business owner’s policy (BOP) is a policy package that includes several types of insurance policies at a discounted rate. A BOP usually includes Commercial General Liability Insurance and Commercial Property Insurance, but may also cover several other foundational business policies, like Professional Liability Insurance. A BOP is a good insurance policy for small businesses to consider as it provides a variety of coverages at a bundled price.


To be liable is to be held responsible by the law. In the world of insurance, liability refers to insurance coverage that protects an individual or business in the event they are sued and found responsible by law for a claim event, such as an injury, malpractice, or property damage. If you are found legally liable, a liability policy will typically cover legal costs and payouts. Intentional damage and contractual liabilities are usually not included. Speak with your broker to understand what the limitations and restrictions of your policy.

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