Having a basic knowledge of crucial business insurance terms can help broaden your understanding of this field. The following terms are all highly relevant to the business insurance world, and having them in your lexicon can be very useful.

1. Agent: An agent is a person who works on behalf of insurance companies to sell and manage insurance policies.

Significance: When you buy insurance, there is a good chance you will do so through an agent. (Read Insurance Agents: What's The Point? to find out whether doing so is right for you.)

2. Broker: A broker is a person who connects buyers and sellers of insurance. They also manage policies.

Significance: Brokers can help you find the best deals.

3. Building, Contents and Stock Insurance: This type of insurance coverage, which often is a part of a commercial property insurance policy, protects a building, its contents, and stock or inventory. (Read Business Insurance: Building, Contents and Stock to find out more.)

Significance: It can protect your businesses from major inventory related losses.

4. Business Crimes Insurance: This type of policy protects against business losses that occur as the result of crimes committed against it, such as fraud, theft, and forgery.

Significance: Your business is not immune to crime-related losses.

5. Business Interruption Insurance: Offers protection in the event that commercial losses accrue due to an unfortunate event that forces the company to seize operations temporarily.

Significance: Businesses have to shut down all the time. This can protect your profits.

6. Captive Agent: A captive agent is an insurance agent who only sells policies for one insurance company.

Significance: These agents cannot offer you policies from multiple companies.

7. Commercial Auto Insurance: This insurance protects your company vehicles and oftentimes the employees who are driving.

Significance: Accidents caused by drivers using your company vehicles can represent substantial losses.

8. Commercial General Liability Insurance: This form of insurance protects your company from the expenses and liability of people getting injured on your property.

Significance: This is a basic type of insurance that your business needs if you have commercial property.

9. Commercial Lines Insurance: This is insurance for any entity engaging in a commercial activity.

Significance: You will likely need several types of commercial lines insurance for your company.

10. Commercial Property Insurance: It covers your actual commercial property in the event that some peril damages it.

Significance: Hurricanes, vandalism, earthquakes, and fires are just a few of the perils that may damage your property.

11. Computer Fraud Coverage: This type of coverage protects your company in the event that hackers steal information or money from your computer networks, or if other computer-based fraud is committed.

Significance: Computer hacking is extremely common at present.

12. Coverage: Coverage is the specific set of circumstances that an insurance company will protect the insured against.

Significance: You will not be reimbursed for damages or losses you don't have coverage for.

13. Effective Date: This is the exact day your insurance policy actually starts providing coverage.

Significance: If you need to file a claim before the effective date, your insurance company will not reimburse you.

14. Employer's Liability Insurance: This insurance provides coverage for companies in the event that one of their employees or a spouse of an employee sues them for contributing to an injury or an illness that occurred on the job site.

Significance: Workers' compensation won't protect you from these types of losses. Only this type of insurance will.

15. Employee Dishonesty Coverage: This type of coverage protects your company from losses accrued due to an employee lying or committing unlawful acts, such as theft.

Significance: Not everyone is honest.

16. Equipment Breakdown Insurance: Equipment breakdown insurance protects against losses that can occur as the result of your important electrical or other machines malfunctioning.

Significance: Equipment can break even if it is new and high-end.

17. Exclusions: Exclusions are hazards or perils that a particular insurer’s plan does nto cover.

Significance: If you try to file a claim for an exclusion, you will not be reimbursed, and you will have to pay for the loss yourself.

18. Forgery insurance: This insurance hedges your business against claims being made as a result of bad checks being written, or other documents signed with a fake signature.

Significance: Checks can be written for millions of dollars. Losses from forgery can be extremely costly.

19. Key Man Insurance: Key man, person, or employee insurance hedges companies against a loss of a key person at the company due to death or disability.

Significance: If there is a key employee at your company, you might sustain significant losses in case they become incapacitated in some way.

20. Marine Cargo Insurance: Marine cargo insurance protects your company from losses that occur from cargo being lost or damaged while being transported from point A to point B by sea.

Significance: Many companies use shipping frequently. This could be a point of vulnerability without marine cargo insurance.

21. Premium: A premium is a fee that a policyholder pays on a regular basis to an insurance company to receive coverage.

Significance: If you don’t pay premiums, you will lose your coverage.

22. Product Liability Insurance: Hedges your company against claims arising out of losses caused by a defect, malfunction, or other issue in a product your company sells.

Significance: Sometimes, products can and do injure people at no fault of their own. It may be worth your while to be prepared for such scenario.

23. Property Damage: Damage or harm that occurs to your property.

Significance: Property damage represents a significant financial hazard to your business.

24. Umbrella Insurance: Insurance for any gaps in coverage that may exist with your existing commercial insurance policies. It is sort of like a last resort in case a loss occurs that another policy does not cover or fully cover.

Significance: Umbrella insurance can be a saving grace in case you need to file an unusual claim, a large claim, or several claims at once.

25. Workers’ Compensation: Also known as workers’ comp, it provides coverage for your employees in the event that they experience losses due to an injury or an illness that happens while they are conducting work for the company.

Significance: Without it, your company could go bankrupt if a few of your employees are seriously injured on the job.