Between “BOPs” and “Riders,” insurance terms can come off as mind-bogglingly obtuse (or is it acute?) At weSure, we are here to simplify insurance and make it understandable, accessible, and maybe even fun!?! So, before you grab a dictionary, or scour the web to decode the mysterious lingo, let us help. We are breaking down a few of the most common, and most important, insurance terms that every small business owner should know. So, keep reading for your super simple crash course: Insurance Terms for Business Owners 101.
BOP
A BOP, aka a Business Owner’s Policy is the one-stop-shop that you are almost definitely going to need to protect your business. It’s a combined insurance for business owners to stay covered against potential losses in multiple ways. That’s because it includes two essential coverages: general liability insurance and commercial property insurance, bundled into one simple package. For some extra credit, learn more about a BOP and what it covers by reading the Insurance Information Institute’s rundown here.
Claim
Sometimes, things go ary. No worries, that’s what insurance coverage is for! Your next step is to make a claim, or a request for cover under your insurance policy. If your business should experience damage, a loss, or gets sued, this is how you let your insurance company know and ask them to have your back. That makes you the claimant, or the person filing a claim. Let’s say your company is found liable for a loss, in this case, the claimant is the person seeking coverage from your business. Easy as pie!
Liability
So what does liability even mean in this context? It simply is a term that means your company is responsible for a loss. Because accidents happen, it is usually crucial to have liability insurance policies for business owners, or a type of coverage that helps protect you from different claims. For example, general liability insurance is a type of coverage for claims that your company caused damage or bodily injury to someone else or a property. Don’t forget to study this one!
Endorsement
Ok, now for a tricky one. What if you want to make changes to your existing insurance policy? There’s a word for that. An endorsement is when you do something to alter the current policy, such as adding or removing coverage. What about if you want a way to add more insurance to the insurance you already have? Rather than needing to get an extra policy, you have the opportunity to get something called a rider, or an addition that provides even more coverage than a basic policy.
Premium
Let’s do a quick pop quiz on some classic insurance terms. Can you tell me what a premium is? 5, 4, 3, 2, 1… Got it? A premium is a fancy way to say the price you pay. Or more specifically, the annual cost for your insurance. When you’re ready to get started selecting your insurance, you’re going to need to get a quote, or the estimate for your premium.
Deductible
Let’s talk about what you really want to know: how much you’re going to have to contribute out of your own pocket, to handle a loss that you incurred. It’s important to note that your insurance provider is there to help you out. Before a challenge arises, you can agree on the amount that will be deducted from the cost of a loss. This amount is called a deductible, or the amount that you are responsible for before your insurance coverage kicks in to pay the rest. Of course, you also agree on the limits your insurer will pay according to your commercial property or liability insurance policy.
Class is almost dismissed. But not before a little optional homework assignment. For more insurance terms you might need to know, take a look at our comprehensive and in-depth insurance terms glossary. At weSure, we make getting insurance policies for business owners as easy as possible, because around these parts — simplicity is a priority. We do the work of breaking it all down so that you can focus on your real work: running your business. Before the next lesson, take a look at what we cover and the businesses we cover to see how easy and exciting insurance can really be! When you’re ready to get started with the best digital insurance out there, click here to get your quote.
