Insurance Terms Glossary

Insurance language is complicated. To help guide you through your claim, our public adjusters have compiled a handy list of definitions for terms you may run across in the process.


  • Accident
    An unexpected event, often with harmful consequences. (See also occurrence.)
  • Accident - Boiler and Machinery
    Various definitions as spelled out in the four object definition forms of the Boiler & Machinery Policy.
  • Accounts Receivables
    The records of money owed to an individual or organization which, if lost, stolen, or destroyed, could prevent their collection; The value of these records can be insured under Inland Marine Accounts Receivable insurance.
  • Actual Cash Value
    The value of property immediately before loss taking into account its "used" condition, wear & tear, etc.; usually considered the "depreciated value, although "market value" and obsolescence may sometimes also be taken into account.
  • Actual Loss Sustained Business Interruption Insurance
    Form of coverage used in Boiler & Machinery Insurance that pays the amount of business income loss actually incurred following an insurance property loss. (In contrast to "Valued" coverage.)
  • ACV
    The commonly used abbreviation for Actual Cash Value.
  • Agreed Amount Clause
    Former name of Agreed Value Option. (see below for definition of Agreed Value Option).
  • Agreed Value Option
    An optional clause for Property & Business Income policies that waives the Coinsurance Clause on a year by year basis based on the filling, and accepting by the insurer, of a statement of actual values on which the amount of insurance for the coming year is based; Failing to file a new statement within the required time results in reapplication of the Coinsurance clause until a new statement is filed and approved. (See Coinsurance.)
  • All-Risks Insurance
    Former name of coverage that applies against all risks of loss not specifically excluded; The term "All-Risks" is no longer used as it seems to suggest (in the minds of insurers) that more coverage is being given than is intended.
  • Assessment Liability
    Liability of an insured condominium owner, cooperative apartment tenant, or others for the cost of assessments laid on the individual owner or tenant to pay for costs or improvements for the common good; Insurance can be purchased to cover this exposure.
  • Average Clause
    Another term for a Coinsurance Clause (See Coinsurance.)


  • Bare Walls Ownership
    A type of Condominium ownership in which the Unit Owner individually owns the inside of the unit up to the inside of the bare outside walls, floor, and roof or ceiling, and the unit owners in common own the remainder of the buildings and grounds. This is one of several possible methods of Condominium Ownership.
  • Blanket Insurance
    Insurance that covers more than one subject of insurance or at more than one location, or both.
  • Boiler and Machinery Insurance
    Insurance that covers boilers and/or machinery against explosion or breakdown losses normally excluded from property insurance policies.
  • Boiler and Machinery Time Element Insurance
    Insurance that covers loss of profits or earnings when an operation is shut down totally or partially by an accident covered by Boiler & Machinery Insurance, or extra expense incurred following accident to maintain or hasten resumption of operations.
  • Building Codes
    Laws passed by municipalities, counties, states, or now even Federal jurisdictions, that regulate how reconstruction must be accomplished after the property is damaged or destroyed, and may even require demolition, and sometimes even prohibit rebuilding if the loss is over a certain degree.
  • Building Ordinance Exclusion
    (Also see Ordinance or Law exclusion.) A standard exclusion found in most property, business income, and boiler & machinery insurance policies that does not cover the added cost of complying with building or zoning laws after an insured loss.
  • Building Ordinance Insurance
    (Also see Ordinance or Law Insurance.) Coverage setting aside the Ordinance or Law exclusion and offering one or more of three coverages for the possible added ordinance or law compliance: 1) demolition costs; 2) loss of value of the undamaged portion of a damaged building; and 3)increased cost of reconstruction to comply with current law.
  • Burglary
    Theft by breaking and entering a building or vehicle.
  • Business Defined
    For Boiler & Machinery Valued Business Interuption, 4 definitions apply: 1) Production, the production of finished goods ready for packing, shipping or sale; 2) Sales, gross sales at the location; 3) Rents, rents collectible at the location, or 4) Income, gross income at the location.
  • Business Income from Dependent Properties - Formerly Contingent Business Interruption Coverage
    A form of business income insurance covering an insured against loss of income and continuing a major supplier, a major customer, or a major location where the insured is a satellite and will lose business if the major shuts down, or (for sales representatives) a manufacturing supplier.
  • Business Income Insurable Value
    Generally Gross Sales less most (but not all) Items of Cost of Goods Sold. (Also figured as Profit plus Continuing Expenses) It determines the amount of business income Insurance that must be carried to satify the Coinsurance (Contribution) Clause of the Business Income policy.
  • Business Income Insurance
    Insurance covering loss of business income and continuing expenses following an insured loss.
  • Business Interruption Coverage
    A former term for business income insurance, still in use in boiler & machinery insurance.


  • Care - Custody - Control
    An exclusion found in most general liability policies, giving no coverage for loss or damage to property held in the care, custody, or control of the insured.
  • Civil Authority Clause
    A clause found in business income policies extending the coverage to loss when adjacent or nearby premises are closed down by order of civil authority, prohibiting occupancy of the insured's premises; usually applies for up to two, or after a waiting period, three weeks.
  • Claims Adjustment Expense
    The cost incurred by the insured or by claim professionals hired by the insured to figure out the more difficult aspects of a claim; many policies do not cover this cost, but special forms and endorsement are available to cover it.
  • Coinsurance Clause