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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.

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Jargon buster

Act of God

A natural event that is beyond human control. For example, flooding or a storm.

 

Loss adjuster

The person who determines how much money should be paid when  someone has made a claim on their  insurance policy.

 

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.

 

All risks

A type of insurance that automatically covers any risk not specifically excluded in the policy wording.

 

Moral hazard

When the person who is insured takes more risks than usual because they believe any repercussions will be covered by their insurance. 

Certificate of insurance

A document issued by your insurer that provides evidence of your insurance coverage.

 

Premium

The amount you pay for your insurance. This is usually paid for on an annual basis, or in instalments.

 

Claims-made policy

A policy that covers claims for events that happened before the policy started. This will be within an agreed timeframe.

 

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.

 

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.

 

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.

 

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.

 

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.

 

Underwriting

The process that insurers go through when deciding whether to offer cover, how much it should cost and what terms to apply.

 

Exclusion

A specific condition, risk or type of loss that your policy does not cover. These should be listed in your policy wording.

 

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.

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About the author

Alison Wild Bcom Hons FMAAT MATT Taxation Technician Commercial Tax Pensions Insurance And Marketing Specialist AuthorAlison 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.