Insurance & compliance glossary

The terms that show up on certificates of insurance and in contract insurance clauses, each defined in a couple of sentences. Alphabetical; every entry links to the guide that covers it in depth.

ACORD 25

The standard industry form for liability certificates of insurance in the US, published by ACORD. Nearly every liability COI uses this layout, which is why most certificates look the same — and why knowing the form once lets you read them all.More: What is an ACORD 25 form?

Additional insured

A person or business added to someone else's liability policy through an endorsement, giving them certain protections under that policy. Contracts often require it. Unlike certificate-holder status, it actually changes who the policy covers.More: Certificate holder vs. additional insured

Aggregate limit

The ceiling on what a policy pays in total across all incidents during the policy term. Shown alongside the per-occurrence limit in a COI's limits columns.More: How to read a certificate of insurance

Binder / “bound” coverage

“Bound” is the industry word for the moment coverage officially takes effect. A binder is temporary written proof of that coverage, issued before the full policy documents are ready.More: How to get a certificate of insurance (fast)

Carrier

The insurance company that writes the policy and pays claims — the companies lettered A, B, C on an ACORD 25. Distinct from the agent or broker (the producer) who sells the policy and issues certificates.More: How to spot a fake certificate of insurance

Certificate holder

The party a certificate of insurance is addressed to — usually the client, general contractor, or property manager who asked for proof of coverage. Being certificate holder shows you received the certificate; by itself it doesn't grant rights under the policy.More: Certificate holder vs. additional insured

Certificate of insurance (COI)

A one-page document summarizing a business's insurance coverage: which policies exist, who carries them, the coverage limits, and when each policy expires. It's proof that coverage exists — not the policy itself — and it doesn't create, extend, or change coverage.More: What is a certificate of insurance (COI)?

Claims-made policy

A policy that covers claims made while the policy is active, subject to its terms — common for professional liability. Continuity matters with claims-made coverage: gaps or missed renewals can affect coverage for past work.More: What's the difference between occurrence and claims-made insurance?

Combined single limit (CSL)

One shared dollar limit covering bodily injury and property damage per accident, commonly used on commercial auto policies instead of separate per-person and per-accident limits.More: How to read a certificate of insurance

Effective date / expiration date

The window a policy is active. Coverage on a COI row applies between those two dates and not a minute after — which makes the expiration date the single field most worth tracking.More: How to read a certificate of insurance

Employer's liability

The part of a workers' compensation policy that covers certain employee-injury claims outside the statutory benefits. On a COI it shows as per-accident and disease limits on the workers' comp row.More: General liability vs. workers' comp insurance

Endorsement

A written amendment that changes a policy's terms — adding an additional insured, a waiver of subrogation, adjusted limits, and so on. Endorsements modify the policy itself; a certificate merely reports that they exist.More: What do additional insured, primary & noncontributory, and waiver of subrogation actually mean?

Errors & omissions (E&O)

Professional liability coverage for claims that advice, designs, or professional services caused a client financial harm. Distinct from general liability, which is about bodily injury and property damage.More: What is errors & omissions (E&O) insurance?

Excess liability

Extra limits stacked on top of an underlying policy, generally following that policy's terms: more dollars, same coverage shape. Often confused with umbrella coverage, which can be broader than the policies beneath it.More: Umbrella vs. excess liability insurance — what's the difference?

General liability (GL) insurance

Coverage for claims that a business's operations injured someone else or damaged their property. It's the baseline policy clients most often ask contractors to prove with a COI.More: General liability vs. workers' comp insurance

Lapse

A gap in coverage — for example when a policy expires or is cancelled (often for non-payment) before replacement coverage takes effect. Incidents during a lapse are generally not covered, which is why expiry tracking exists.More: How to spot a fake certificate of insurance

Named insured

The business or person a policy covers, exactly as written on the policy. On a certificate, the insured's name should match the legal name of the company you're actually dealing with — a mismatch is worth a phone call.More: How to read a certificate of insurance

Occurrence policy

A policy that covers incidents happening during the policy period, even if the claim is filed after the policy ends. The common structure for general liability coverage.More: What's the difference between occurrence and claims-made insurance?

Per-occurrence limit

Roughly, the most a policy pays for a single incident. Appears in a COI's limits columns as “each occurrence,” next to the aggregate limit.More: How to read a certificate of insurance

Primary and noncontributory

Contract and endorsement wording meaning one party's policy pays first (primary) and won't ask the other party's own insurance to contribute (noncontributory). Often requested in construction contracts alongside additional-insured status.More: What do additional insured, primary & noncontributory, and waiver of subrogation actually mean?

Producer

The insurance agency or brokerage that prepared and issued a certificate, listed with contact details in the COI's top-left corner. The producer is who you call to verify a certificate or request a new one.More: How to read a certificate of insurance

Subrogation

An insurer's right, after paying a claim, to recover what it paid from whoever caused the loss.More: What do additional insured, primary & noncontributory, and waiver of subrogation actually mean?

Surplus lines carrier

A carrier that writes coverage for risks the standard licensed market won't take. The coverage can be entirely legitimate, but the company may not appear in a state's standard licensed-company lookup — a good reason to confirm unusual carriers with the producer.More: How to spot a fake certificate of insurance

Umbrella policy

Extra liability coverage that sits on top of underlying policies like general liability or auto. Beyond adding dollars, an umbrella can be broader than the policies beneath it in some cases — the details vary by policy.More: Umbrella vs. excess liability insurance — what's the difference?

Waiver of subrogation

An endorsement in which an insurer gives up its right to recover claim payments from a specific party, often the client or GC named in a contract. A common construction-contract requirement.More: What do additional insured, primary & noncontributory, and waiver of subrogation actually mean?

Workers' compensation

Coverage for employees' work-related injuries and illnesses, with benefits generally set by state law — that's what the “per statute” checkbox on an ACORD 25 refers to. What's required varies by state and business type.More: General liability vs. workers' comp insurance

These definitions are general information for US trades businesses, not legal or insurance advice. What a policy actually covers is controlled by its own terms, and requirements vary by state and contract — confirm the specifics with your insurance agent or your client’s contract.