If you spend enough time around insurance professionals, you’ll start to pick up on a lot of jargon. As a business owner, commercial insurance is absolutely essential for your business. But the industry-specific terms can make it hard to understand what exactly your policy includes.
That’s why we’ve taken it upon ourselves to give you a working definition of 10 common commercial insurance terms. All you have to do is keep reading.
1. Actual Cash Value
In basic terms, actual cash value is the value of an item minus depreciation.
That might sound rather complicated but all it really means is that when the worth of an item is being assessed by the actual cash value, it’s being assessed based on the price it would currently fetch rather than the price you paid for it.
2. Business Interruption Insurance
This is an insurance coverage option that makes it possible for a company to receive financial relief in the event that a disaster occurs that makes it impossible for you to continue to do business.
3. Premium
Your premium is the amount of money that you pay in order to be covered by an insurance policy.
4. Deductible
The deductible is the money that you’re expected to pay before you can cash out on the benefits of your policy.
5. Commercial General Liability
Commercial general liability insurance is most commonly associated with slip and fall accidents because it provides coverage against claims of bodily injury and property damage that have been suffered by a third party. This policy will cover you for litigation and lawsuit-related expenses.
6. Replacement Value
If you see “replacement value” listed in your policy, it means that given the choice between repairing or buying a replacement item, your insurance will cover the cheaper option.
6. Replacement Value
If you see “replacement value” listed in your policy, it means that given the choice between repairing or buying a replacement item, your insurance will cover the cheaper option.
7. Specified Perils
Like the name says on the tin, this is a type of insurance coverage where the only causes of loss you’re covered from are the ones that are specifically named in your policy.
8. Open Perils
This is insurance that covers you against everything except for what’s named in your policy. The general rule of thumb is that as long as the cause of loss isn’t excluded, it’s covered.
9. Insurance Limits
Insurance coverage isn’t infinite. The limit of a policy is the maximum dollar amount that your insurer will allow you to claim.
10. Commercial Property Insurance
This is an insurance type that covers the cost of repairing or replacing property, whether that’s inventory, equipment, or computers, among other items, in the aftermath of a covered loss.
Conclusion
At Oracle RMS, our brokers deliver top-notch commercial insurance in a way that’s straightforward and simple to understand. Contact us for your FREE quote today!
