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Business Insurance Glossary — A Through C





death benefits Should a policy holder become terminally ill, need extreme medical intervention or require nursing home care, these proceeds would be paid — while the policy holder is still living — to cover such costs. Payments made while a policy holder is alive are deducted from any remaining policy proceeds that a beneficiary would receive.

Actual cash value
A form of insurance or type of insurance benefit that pays damages equal to the replacement value of damaged property minus depreciation. Depreciation is determined by the age and condition of the insured property. (See also replacement cost)

Adjuster (see also public adjuster and independent adjuster)
An individual employed by a property or casualty insurer to evaluate losses and settle claims.

A professional licensed by the state who represents insurance carriers and sells insurance.

Aggregate limits
The maximum dollar amount of coverage an insurer is under contract to provide to any one insured person or entity.

Agricultural insurance
This type of insurance covers a farm or ranching operation's dwellings, structures and machinery. Depending on the type of company to be insured, a business owner may choose to purchase protection for crops or livestock, as well. (See also crop insurance and livestock insurance)

A.M. Best
An independent organization that rates insurance companies' financial stability against a rigorous set of criteria. Factors analyzed include insurers' operating costs, performance, business profile and balance sheet strength. These ratings reflect the opinion of A.M. Best and are not a guarantee of a company's financial strength, or its ability to meet policy holder obligations.

A survey used to determine a property's insurable value or the amount of loss.

Property owned by a policy holder including but not limited to stocks, bonds and real estate.

Auto insurance
There are basically six types of auto insurance coverage, some required by law and some not:
  1. bodily injury liability, for injuries the policy holder causes to someone else
  2. medical payments or personal injury protection for treatment of injuries of the driver and passengers incurred while driving or riding in the policy holder's vehicle
  3. property damage liability, for damage the policy holder causes to someone else's property
  4. collision, for damage to the policy holder's vehicle from a collision
  5. comprehensive, for damage to the policy holder's vehicle not involving a collision with another vehicle (including damage from fire, explosions, earthquakes, floods, riots and theft)
  6. uninsured motorist coverage, for costs resulting from an accident involving a hit-and-run driver or a driver who does not have insurance
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In addition to an annual salary, an employer may choose to offer employees paid time off, profit sharing and health care coverage as part of the company's overall compensation package.

Blanket insurance
This type of coverage allows business owners to insure more than one type of property at one location or one type of property at multiple locations under one policy.

A temporary evidence of insurance coverage for an applicant before a policy is issued.

A licensed insurance professional who typically works on commission to find suitable insurance for clients.

Business auto insurance
This type of policy covers cars, trucks and vans used for commercial purposes.

Business health insurance
To offset employees' medical care expenses, an employer may choose to include this type of coverage in a company's benefits package.

Business identity theft insurance
If a company's confidential customer data is lost or stolen, sensitive information may be at risk. This type of insurance provides legal liability coverage to businesses in the event of data theft. (See also identity theft)

Business insurance
Customized coverage that can be tailored to meet companies' specific insurance needs. Available options may include business owners policy, business umbrella liability, workers' compensation and professional liability protection.

Business insurance planning
A process through which Wells Fargo Business Insurance Planners help business owners determine risk tolerance, assess current coverages and provide business insurance protection recommendations tailored to their unique needs.

Business interruption insurance
When a business must vacate the site where it operates due to covered damages resulting from a fire or other disaster, this type of protection provides reimbursement for projected profits and related expenses that continue to accrue (such as leased business equipment) while the company's operations are suspended.

Business liability insurance
This type of protection covers the cost of damages for which a company is found liable (up to policy limits), legal fees and the medical bills of anyone injured by the policy holder's business.

Business life insurance
Often purchased by business owners as part of an overall continuation plan, this coverage replaces lost income in the event of a co-owner's death. (See also key person life insurance)

Business owners policy
This type of insurance combines property and liability coverages into one convenient, cost-effective policy.

Business property insurance
Covers a business's physical structure and its contents.

Business umbrella liability insurance
Provides companies with an extra layer of liability protection in the event of a catastrophic loss, such as a lawsuit.
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A statistical term used to describe a single incident or a series of closely related events that cause major insured property losses in excess of a specified amount (currently $25 million).

Claim settlement
Compensation (typically monetary) provided by an insurer to a policy holder or beneficiary upon resolution of a previously submitted claim.
This term is used in reference to both health insurance and property insurance; in each case, its meaning is unique.
  • Health insurance — Coinsurance is a percentage of each claim above the deductible paid by the policyholder. Usually, a health insurance policy will establish a ceiling on total policy holder payments above which the insurer will pay 100% of insured costs.
  • Property — Coinsurance is the amount of coverage that a policy holder is required to carry in order for an insurance company to cover 100% of a loss, usually stated as a percentage of the value of the insured property.

Collision coverage
When a policy holder is involved in an accident with another car or a stationary object, this policy covers the cost of related damages. (See also comprehensive coverage, liability coverage and uninsured motorist coverage)

Comprehensive coverage
Covers a policy holder for costs resulting from damage to his or her car caused by fire, theft, flood, vandalism or other named event — instead of damage caused by a collision with another vehicle. (See also collision coverage, liability coverage and uninsured motorist coverage)

Coordination of services
In the event a policy holder has overlapping coverage (more than one plan), the insurance carriers will determine which company is responsible for payment of benefits, so duplicate payments do not occur.

Credit score
Lenders use this number to assess a potential borrower's ability to repay debt — and also determine whether or not to grant credit. Data considered when calculating this figure includes — but is not limited to — types of credit the business has established, length of credit history, debt-to-income ratio and credit use patterns.

Crop insurance
Hail, windstorm, wildfire, drought and insect infestations can destroy a farming operation's crops. This coverage protects business owners in the event of such devastating loss. (See also agricultural insurance and livestock insurance)
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