405.703.2834Hablamos Español1700 N Broadway, Moore, OK1700 N Broadway, Moore, OK
Clear View Insurance
Glossary

Insurance terms, in plain English.

The acronyms and forms you actually hear on contracts and renewals — defined in everyday language, with a short generic example for each. Definitions are educational and do not modify, summarize, or guarantee coverage under any policy.

A

ACV

Also known as: Actual Cash Value

Actual Cash Value settles a covered loss based on what the item was worth right before it was damaged — replacement cost minus depreciation for age and wear. ACV settlements are typically lower than replacement-cost settlements, especially on older roofs, electronics, and contents. Whether a policy pays ACV or replacement cost is determined by the policy form and endorsements.

Example

A ten-year-old roof damaged by hail is settled at ACV — the insurer pays what a ten-year-old roof was worth, not the cost of a brand-new roof.

Additional Insured

An additional insured is named on another party's liability policy — usually via endorsement — so they receive defense and indemnity for claims tied to the named insured's operations. It is common in contracts where one party requires another to extend coverage as a condition of doing business. Additional-insured status only applies to the specific operations and limits described in the endorsement.

Example

A landlord requires a tenant to name them as an additional insured on the tenant's general liability policy for slip-and-fall claims at the leased premises.

B

BOP

Also known as: Business Owner's Policy

A Business Owner's Policy combines commercial property coverage with general liability into a single contract designed for lower-hazard businesses. It often includes business income coverage and can be endorsed for additional needs. Larger or more complex risks are usually written on monoline property and liability policies instead of a BOP.

Example

A small accounting firm with one leased office uses a BOP to cover office contents, the suite improvements, and liability for client visits.

Builder's Risk

Builder's Risk covers the structure, on-site materials, and often materials in transit during construction. It is written for a defined project term and typically ends when the project is completed, occupied, or accepted. Coverage triggers, soft-cost extensions, and named perils vs. special-form wording vary by policy.

Example

A general contractor buys a Builder's Risk policy for a six-month commercial build-out to cover framing, drywall, and on-site materials against fire and theft.

C

CCIP

Also known as: Contractor-Controlled Insurance Program

A CCIP is a project-specific insurance program — usually general liability and sometimes workers' compensation — placed by the lead contractor to cover everyone working on the job. Enrolled subcontractors typically exclude that project from their own policies to avoid duplicate premium. The wrap-up's terms, deductibles, and exclusions govern coverage for project losses.

Example

A general contractor on a large hospital build sets up a CCIP that covers itself and all enrolled subs for general liability claims arising from that project.

COI

Also known as: Certificate of Insurance

A Certificate of Insurance is evidence that a policy exists; it is not the policy itself and does not change or extend coverage. COIs are commonly requested by clients, landlords, lenders, and contracting parties to confirm minimum required limits and to add themselves as certificate holders or additional insureds. The underlying policy and endorsements always control in a claim.

Example

A subcontractor sends a COI to a general contractor before starting work, confirming general liability and workers' compensation limits.

D

Deductible Buy-Down

A buy-down sits on top of an existing policy and pays part of the deductible the insured would otherwise owe. They are most often used when carriers require a high wind/hail or named-storm deductible. The buy-down has its own premium, terms, and conditions, and only responds to losses covered by the underlying policy.

Example

A homeowner with a 2% wind/hail deductible adds a buy-down policy that pays the difference between that deductible and a smaller flat amount on a covered hail claim.

DP-3

Also known as: Dwelling Fire Form 3 · Special Form Dwelling

The DP-3 is one of the standard dwelling fire forms used for landlord-owned properties. It typically covers the dwelling on an open-perils basis and personal property on a named-perils basis, and includes fair rental value and liability when endorsed. It is generally not used for owner-occupied primary homes — those are usually written on a homeowners form.

Example

A landlord renting out a single-family home is written on a DP-3 with fair rental value and landlord liability instead of a standard homeowners policy.

E

EMOD

Also known as: Experience Modification Rate · EMR · X-Mod

An EMOD is calculated by a rating bureau using past payroll and loss data from a defined experience period. A 1.00 is the industry average; below 1.00 reduces premium, above 1.00 increases it. Many project owners and general contractors require subcontractors to maintain an EMOD at or below a stated threshold to qualify to bid.

Example

A contractor with an EMOD of 0.85 pays roughly 15 percent less in workers' comp premium than an average employer in the same class code.

Endorsement

Also known as: Rider

An endorsement is part of the policy contract once attached. It can broaden coverage (for example, scheduling jewelry), restrict coverage (for example, excluding a specific peril), or change administrative details like the named insured or mortgagee. The endorsement form number on the declarations identifies exactly what was changed.

Example

A homeowner adds a scheduled personal property endorsement to insure an engagement ring on an agreed-value basis.

G

General Liability

Also known as: CGL · Commercial General Liability

A CGL policy responds to third-party claims of bodily injury or property damage tied to premises, operations, or completed products and work. It includes defense costs in addition to limits in most forms and is typically written with per-occurrence and aggregate limits. CGL does not cover employee injuries (workers' comp), auto liability, or professional services.

Example

A customer slips in a retail store and is injured; the store's general liability policy responds to the bodily injury claim and the defense costs.

H

HO-3

Also known as: Special Form Homeowners

An HO-3 covers the home itself against any peril not specifically excluded and covers personal property against a list of named perils. It includes liability and additional living expense coverage. Specific exclusions — flood and earth movement, for example — typically require separate policies or endorsements.

Example

A homeowner's HO-3 responds when a kitchen fire damages the structure and contents, and a separate flood policy is purchased for flood risk.

I

Inland Marine

Despite the name, inland marine covers land-based property that travels, is high-value, or has specialized exposures — contractors' tools and equipment, fine art, jewelry schedules, signs, and goods in transit. It is typically written on broad open-perils forms with limited deductibles. Coverage triggers depend on whether the item is owned, leased, or in the insured's care, custody, or control.

Example

A contractor schedules excavators, trailers, and small tools on an inland marine policy so they're covered while moving between job sites.

M

MSA

Also known as: Master Service Agreement

An MSA sets baseline terms — scope, payment, liability, indemnity, insurance — that apply to every job ordered under it, with individual work orders layered on top. The insurance section commonly dictates required limits, additional-insured status, waiver of subrogation, and primary/non-contributory wording. The insurance program has to be built to match what the MSA actually requires.

Example

An oil and gas operator's MSA requires every service company to carry stated limits of general liability, auto, and workers' compensation, and to add the operator as an additional insured.

N

Named Insured

The named insured has the broadest rights under the policy — including the right to make changes, cancel, and collect claim payments. Additional named insureds and additional insureds receive narrower rights, defined by the policy and any endorsements. Getting the named insured right matters: an LLC, a DBA, and an individual owner are distinct legal entities.

Example

A small business is owned by an LLC, but the policy is mistakenly issued in the owner's personal name — the LLC may not be insured at all until the named insured is corrected.

O

OCIP

Also known as: Owner-Controlled Insurance Program

An OCIP is a project-specific insurance program placed by the owner — usually general liability and sometimes workers' compensation — covering everyone working on the project. Enrolled contractors and subs typically exclude the project from their own policies. The wrap-up's terms, deductibles, and exclusions govern project losses; non-enrolled exposures stay on the contractor's own policies.

Example

A hospital system places an OCIP on a new tower construction, covering the GC and all enrolled subs for general liability arising from that project.

R

Replacement Cost

Replacement Cost settlements use today's cost to repair or replace, subject to policy limits and conditions. Many policies pay ACV first and then release the depreciation holdback after repairs are completed and documented. Coinsurance, special limits, and roof-specific endorsements can all modify how replacement cost actually settles.

Example

A homeowner with replacement-cost coverage on the dwelling receives the full cost to rebuild after a covered fire, not the depreciated value of the older structure.

U

Umbrella

Also known as: Personal Umbrella · Commercial Umbrella · Excess Liability

An umbrella adds limits — commonly in millions — above the liability sections of underlying home, auto, watercraft, rental, or commercial policies. It can also drop down to cover certain claims excluded by the underlying policies, depending on the form. Umbrellas require specified minimum underlying limits and have their own exclusions and conditions.

Example

A driver is found at fault for a serious auto accident exceeding their auto liability limit; the personal umbrella responds for the excess up to the umbrella limit.

W

Waiver of Subrogation

Subrogation is the insurer's right to step into the insured's shoes and recover payments from the party that caused a loss. A waiver of subrogation, typically required by contract, prevents the insurer from pursuing that named party. Adding the waiver usually requires a specific endorsement on the underlying policy and may carry a premium charge.

Example

A construction contract requires the subcontractor's workers' comp carrier to waive subrogation against the general contractor and project owner.

Workers' Compensation

Also known as: Workers' Comp · WC

Workers' compensation is governed by state law; benefits, class codes, and rating are set by state regulators and rating bureaus. Part One pays the statutory benefits owed to injured employees. Part Two (employer's liability) responds to certain related lawsuits brought against the employer.

Example

A warehouse employee injures their back lifting a pallet; workers' compensation pays the medical bills and a portion of lost wages while they recover.

↑ Back to top
Ready when you are

Talk to a producer. No script, no pitch.