Commercial Insurance Agents and Brokers Key Terms

Learn commercial insurance agents and brokers key terms to enhance your professional image

When you work as a commercial insurance agent or broker, it's important to understand commercial insurance agents and brokers key terms. This not only helps you communicate with clients, but it also helps you in contractual setup. When you know the definitions and understand the nuances of the industry lingo, you can also use the language effectively to offer tight contracts that benefit the client. It also shows that you keep current with industry trends and terminology.

 

Advance premium

At times, there is no way to set a price for a policy premium until you reach the end of the term. The advance premium, or deposit premium, is the amount a client pays toward the final premium cost. In essence, the advance premium works like a down payment.
Try: The State of New York Insurance Department has a website dedicated to information on advance premium questions. It offers answers, provides a general analysis and offers a conclusion for advance premium transactions.

Surety bond

Brokers use this term when referring to the assumption of the responsibility of a person or group to fulfill the financial obligations of another person.
Try: Worldwide Insurance Specialist offers information on surety bonds, including underwriting and how to apply for one.

Commercial Package Policy

A Commercial Package Policy (CPP) is a policy that has two or more insurance lines or coverage parts. It must have two or more parts in liability coverage, commercial general liability, boiler and machinery, auto (commercial or farm), property, crime or inland marine.
Try: InsuranceNoodle offers a detailed summary on commercial package policies. It explains coverage in depth and includes information on what this type of policy covers. It also discusses factors that affect cost.

Indemnity

This is one of the pillars of insurance coverage, the compensation for any sustained injury or loss.
Try: Go to FreeAdvice.com, a site dedicated to offering advice on matters of the law, to find out more information on indemnity and other insurance issues.

Misrepresentation

A misrepresentation occurs when a company or client misstates information, resulting in an error. The error may involve facts on the policy or pertain to information about the person getting insurance.
Try: The Boston ERISA Law Blog offers expert insight into the matter of misrepresentation in insurance coverage. It offers insight into the way this term affects clients, as well as agents and brokers, and links to areas where you can find out more on the topic.

Proximate cause

A proximate cause is an event that leads to a series of events in an unbroken sequence yielding a direct loss physically for subjects covered under an insurance policy. An example of this would be wind in a windstorm that causes damage. For example, when wind blows out a window and causes glass to knock over a lit candle, which burns down a building, the wind is the proximate cause.
Try: The Insurance Dispute Lawyer Blog defines the term proximate cause and offers examples. Another site that offers detailed examples of proximate cause is O'Mahony Boylan Golden (Munster).

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