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Your Insurance Jargon Buster - 2025 Edition
Your Insurance Jargon Buster - 2025 Edition
When it comes to arranging your insurance as a small business, you may come across some terms you’ve not heard of before. At Towergate Insurance, we’re dedicated to making the complex simple and talking about insurance in a way that everyone can understand.
To help get you started, our jargon buster puts things simply so you can unscramble the meanings of those unfamiliar terms.
Jargon buster
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Act of God A natural event that is beyond human control. For example, flooding or a storm.
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Loss adjuster The person who determines how much money should be paid when someone has made a claim on their insurance policy.
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Aggregate limit A cap on the total amount an insurer will pay out over the duration of your policy. |
Material damage Physical loss, damage or destruction to property or contents.
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All risks A type of insurance that automatically covers any risk not specifically excluded in the policy wording.
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Moral hazard When the person who is insured takes more risks than usual because they believe any repercussions will be covered by their insurance. |
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Certificate of insurance A document issued by your insurer that provides evidence of your insurance coverage.
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Premium The amount you pay for your insurance. This is usually paid for on an annual basis, or in instalments.
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Claims-made policy A policy that covers claims for events that happened before the policy started. This will be within an agreed timeframe.
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Risk appetite The level of risk an insurer will accept when offering cover. For example, a home insurer may have a low-risk appetite for properties in high flood risk areas, meaning they can refuse cover or charge higher premiums.
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Claims-occurring policy If your policy is written on a claims occurring basis, it will only pay out for claimable incidents that happened within the duration of the policy. |
Subrogation When an insurer recovers their costs from a third party responsible for the loss. This is common in car insurance when a car accident is caused by another driver.
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Endorsement Any change or addition to the terms of your policy. This can happen before you take out the policy, after you have been insured or at the policy’s renewal.
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Sums insured The maximum amount an insurer will pay out in the event of a claim. For example, in home insurance this would be the total cost to rebuild your property including material and labor.
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Excess A change to a policy that can modify, increase or restrict coverage to better suit the policyholder’s needs. This can happen throughout the duration of your policy and at renewal.
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Underwriting The process that insurers go through when deciding whether to offer cover, how much it should cost and what terms to apply.
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Exclusion A specific condition, risk or type of loss that your policy does not cover. These should be listed in your policy wording.
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Click here to view our PDF
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Get in touch
At Towergate Insurance, we can help you get this right from the outset and will stand by your side if you need to make a claim. Want to know more? Get in touch on 0330 828 5378.
About the author
Alison Wild BCom (Hons), FMAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a Fellow member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has 20 years' experience as a residential landlord.
Consistent with our policy when giving comments and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems, we recommend that professional advice be sought.
Date: July 07, 2025
Category: Small Business
