The short answer
This glossary defines the insurance terms that show up in customer contracts and term sheets, from additional insured to retroactive date, in one sentence each. Where a term needs more, it links to the page that covers it. StartupInsurance.ai keeps it current as contract language changes.
Use this guide to prepare questions, not to establish coverage. Any unsourced costs, limits or timing ranges are illustrative planning examples, not quotes, verified market averages or carrier commitments.
Startup insurance terms, A to Z
| Term | Definition |
|---|---|
| ACORD 25 | The standard certificate of liability insurance form used to show coverage to customers |
| Additional insured | A party, usually a customer, added to your policy for claims arising from your work; see vendor onboarding endorsements |
| Admitted carrier | An insurer licensed in your state, with policy forms and rates filed with the regulator |
| Aggregate limit | The most a policy pays in a policy period for all claims combined |
| AM Best rating | A grade of an insurer’s financial strength and size, such as A- VII |
| Binder | Temporary written confirmation that coverage is in force before the policy is issued |
| Blanket endorsement | An endorsement that applies to any party your written contract requires |
| Businessowners policy (BOP) | A package of general liability and property coverage for small businesses; see general liability for startups |
| Certificate holder | The party a certificate of insurance is issued to, usually the customer |
| Claims-made | A policy that covers claims made during the policy period for acts after the retroactive date |
| Completed operations | Coverage for claims arising from your work after it’s finished |
| Contractual liability | Liability you take on by contract; often excluded beyond what the law would impose |
| Deductible | The amount you pay on a claim before the insurer pays, often per claim |
| Declarations page | The page summarizing a policy’s insureds, limits, premium and dates |
| Excess policy | A policy that pays above another policy’s limit, on that policy’s terms |
| Exclusion | A situation or loss the policy doesn’t cover |
| Extended reporting period (tail) | Extra time to report claims after a claims-made policy ends |
| First-party coverage | Coverage for your own losses, such as breach response costs |
| Follow form | An excess policy that follows the terms of the policy below it |
| Indemnity | A promise to cover another party’s losses; in contracts, often broader than insurance |
| MGA | A managing general agent that underwrites and issues policies on behalf of insurers |
| Non-admitted (surplus lines) | An insurer not licensed in your state but allowed to write risks admitted carriers won’t |
| Occurrence | A policy that covers incidents during the policy period, whenever the claim arrives |
| Primary and noncontributory | Your policy pays first, without seeking contribution from the customer’s insurer |
| Retention | The amount you pay on a claim before the policy responds; similar to a deductible |
| Retroactive date | The earliest date of acts a claims-made policy covers |
| Side A, B and C | The three parts of D&O: individuals, company reimbursement and entity coverage |
| Sublimit | A smaller cap within a policy limit for one type of loss |
| Third-party coverage | Coverage for claims others make against you |
| Waiver of subrogation | Your insurer gives up its right to recover a paid claim from the customer |
| Technology errors and omissions | Coverage for customer losses when your technology fails; see Tech E&O for startups |
StartupInsurance.ai can explain any term as it applies to your contract. Contract wording for many of these is annotated in the insurance clause library.
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A few more answers
Frequently asked questions
What's the difference between a deductible and a retention?
Both are what you pay before the insurer does. A deductible is usually paid back to the insurer after it pays; a retention is paid first, by you, before the policy responds.
What does "aggregate limit" mean in an insurance requirement?
It's the most the policy pays for all claims in one policy period. A $1M/$2M general liability policy pays up to $1M per incident and $2M in total for the year.
What does "follow form" mean?
It describes an excess policy that adopts the terms of the policy beneath it. It pays above that policy's limit, but won't raise the lower policy's sublimits.
What is a certificate holder?
The person or company a certificate of insurance is issued to, usually the customer requesting proof. Being a certificate holder alone grants no coverage.
What's the difference between "per occurrence" and "per claim"?
Per occurrence limits apply to each incident, used on occurrence policies like general liability. Per claim limits apply to each claim, used on claims-made policies like Tech E&O.
General information, not a coverage determination or legal advice. Unless a specific source is identified, prices and timing ranges are illustrative planning examples—not measured market averages, quotes or guarantees. Policy wording, carrier, state and your company’s operations determine what applies.