Insurance paperwork has its own language. Here are the terms you’ll see most often on a general liability quote, policy or certificate of insurance, in plain words.
Additional insured. A person or business, other than you, added to your policy so they’re protected for claims that come out of your work for them. GCs and property owners often ask for it. (See Additional insured explained.)
Aggregate limit. The most the insurer will pay for all claims combined during the policy period. Once it’s used up, nothing more is paid until the policy renews.
Binder. A temporary document confirming coverage is in place while the full policy documents are being finalized.
Bodily injury. Physical injury, sickness or disease to another person, and related costs such as medical expenses.
Bound. Coverage is bound when it’s officially in force. With Worksured, coverage is not considered bound until you have received confirmation from a licensed broker.
Broker. A licensed professional who arranges insurance for you with an insurer. In Ontario, insurance brokers are licensed by RIBO. The broker works with you; the insurer issues the policy and pays covered claims.
Certificate holder. The party a certificate of insurance is addressed to, usually the client who asked for it. Being a certificate holder gives them no rights under your policy. Being an additional insured does.
Certificate of insurance (COI). A one- or two-page summary of your coverage: insurer, policy number, type of coverage, limits, dates, certificate holder and any additional insured. It’s the proof clients ask for before you start. (See What is a certificate of insurance.)
Claim. A formal request to the insurer for payment for a loss or incident your policy may cover.
Commercial general liability (CGL). The full name you’ll often see on certificates and contracts for general liability insurance.
Completed operations. Claims that arise after a job is finished, such as a leak discovered weeks after an installation.
Course of Construction (COC). Cover for a building or project while it’s under construction, against risks such as fire or weather. It’s separate from your liability policy. Coming soon through Worksured.
Deductible. The amount you pay yourself before the insurance applies to a claim.
Endorsement. A change or addition to your policy that modifies its standard terms, such as adding an additional insured.
Exclusion. Something your policy specifically doesn’t cover. Every policy has exclusions, listed in the policy wording.
Inland marine (Tools & Equipment). Cover for your tools and equipment, especially items that move between job sites, against theft or damage. Coming soon through Worksured.
Insurer. The company that issues the policy and pays covered claims.
Liability. Legal responsibility for injury or damage caused to another person or their property.
Named insured. The person or business the policy is issued to: you. The name should match the one on your contracts.
Occurrence. A single event or incident, including continued exposure to the same conditions, that leads to a claim. Most GL policies are written on an occurrence basis: what counts is when the incident happened, not when the claim is filed.
Per-occurrence limit. The most the insurer will pay for a single incident, as opposed to the aggregate limit for all claims combined.
Policy period. How long the policy is in force, typically 12 months, after which it has to be renewed.
Premium. The amount you pay for your policy.
Products liability. Claims arising from a product you supplied or installed that later causes injury or damage.
Renewal. Continuing your policy for another period. Check the expiry date well before it arrives: a lapsed policy can keep you off a site.
Third party. Anyone other than you and the insurer: a client, a neighbour, a passer-by. GL is about claims from third parties.
Umbrella policy. Extra liability cover that sits on top of an existing policy and extends its limits once the underlying limit is used up.
WSIB. The Workplace Safety and Insurance Board, Ontario’s workers’ compensation system. It covers people who work for you if they’re hurt on the job. It doesn’t replace general liability, and general liability doesn’t replace it. WSIB can tell you whether your business needs an account.
All insurance policies have coverage limitations and should be reviewed. Coverage is subject to the terms of your policy.
This article is general information about insurance for contractors and tradespeople in Ontario. It isn’t advice about your business or your policy. All insurance policies have coverage limitations and should be reviewed. Coverage is subject to the terms of your policy. Coverage is not considered bound until you have received confirmation from a licensed broker. [TO CONFIRM: bound line depends on the issuance process]
[TO CONFIRM: add once licensed: “Worksured Insurance Group is a RIBO Licensed Insurance Broker.”]