skip to main content
Travelers Logo
  • About
  • Careers
  • Agents
  • Investors
  • Sustainability
  • Contact Us
  • For Individuals
    • Overview
    • Products
      • Car
      • Home
      • Renters
      • Condo
      • Landlord
      • Boat & Yacht
      • Flood
      • Motorcycle
      • Travel
      • Pet
      • Weddings
      • Umbrella
      • All Products
    • Prepare & Prevent
      • Insurance 101
      • Home Central
      • Travelers Garage
      • Managing Through COVID-19
    • Affinity Group Discount
    • Online Service
    • Pay Your Bill
      • Get a Quote
      • Find an Agent
      • File a Claim
      • Pay Your Bill
  • For Business
    • Overview
    • Products & Solutions
      • Overview
      • Boiler & Machinery
      • Commercial Auto & Trucking
      • Cyber
      • Environmental Liability
      • Excess Casualty & Umbrella
      • General Liability
      • Global Insurance
      • Inland Marine
      • Management & Professional Liability
      • Ocean Marine
      • Property
      • Business Owner's Policy
      • Surety Bonds
      • Workers Compensation
        • Find an Agent
        • File a Claim
        • Pay Your Bill
    • Industries
      • Overview
      • Agribusiness
      • Architects, Engineers & Surveyors
      • Auto & Truck Dealers
      • Business & Professional Services
      • Construction
      • Education
      • Energy & Renewable
      • Equipment Dealers
      • Financial Institutions
      • Food Services
      • Health & Related Services
      • Hospitality & Recreation
      • Manufacturing
      • Marine Industries
      • Museums & Fine Art
      • Non-Profit
      • Oil & Gas
      • Public Entities
      • Real Estate
      • Retail
      • Technology
      • Transportation
      • Wholesale & Distribution
        • Find an Agent
        • File a Claim
        • Pay Your Bill
    • Services
      • Overview
      • Risk Control
      • Claim
      • Premium Audit
      • Online Customer Tools
      • Risk Management Information Services
      • Travelers Client Advantage
        • Find an Agent
        • File a Claim
        • Pay Your Bill
    • Small Business
      • Overview
      • Automobile Insurance
      • Business Owner's Policy
      • Data Breach
      • Employment Practices Liability
      • Professional Insurance
      • Umbrella Insurance
      • Workers Compensation Inurance
        • Find an Agent
        • File a Claim
        • Pay Your Bill
    • Large Business
      • Overview
      • Casualty
      • Cyber
      • Management & Professional Liability
      • Property
        • Find an Agent
        • File a Claim
        • Pay Your Bill
    • Multinational Business
    • Prepare & Prevent
      • By Topic
      • By Industry
      • Navigating Your Business Through COVID-19
        • Find an Agent
        • File a Claim
        • Pay Your Bill
      • Find an Agent
      • File a Claim
      • Pay Your Bill
  • Claim Center
    • Claim Center
    • Should I File a Claim?
    • File a Claim
    • Roadside Assistance
    • Find a Service Provider
    • Check Your Claim Status
    • Manage Your Claim Experience
      • Understanding the Claim Process
      • Claim Guide Library
      • Workers Compensation Resources
    • Claim Capabilities
      • Get a Quote
      • Find an Agent
      • File a Claim
      • Pay Your Bill
  • Prepare & Prevent
    • For Individuals
    • Home Central
      • Buying & Selling
      • Home Maintenance
      • Home Renovation
      • Home Safety
      • Moving
      • Smart Home
    • Travelers Garage
      • Buying & Selling
      • Car Maintenance
      • Distracted Driving
      • Safe Driving
      • Teen Driving
      • Boating
    • Insurance 101
    • Weather
    • For Business
    • Industries
      • Construction
      • Manufacturing
      • Nonprofit
      • Small Business
      • Technology
    • Topics
      • Business Continuity
      • Cyber
      • Driver and Fleet Safety
      • Facilities Management
      • Internet of Things
      • Product and Services Liability
      • Supply Chain Management
      • Workplace Safety
    • Travelers Risk Index
      • Get a Quote
      • Find an Agent
      • File a Claim
      • Pay Your Bill
  • About Travelers
    • Overview
      • Awards & Recognition
      • Careers
      • Community
      • Diversity & Inclusion
      • Sustainability
      • History
      • Investors
      • Media Resources
      • News
      • Travelers Championship
      • Travelers Institute
      • Get a Quote
      • Find an Agent
      • File a Claim
      • Pay Your Bill
    • Get a Quote
    • Find an Agent
    • File a Claim
    • Pay Your Bill
Main Navigation
  • For Individuals
      • Insurance for Individuals
      • Products
        • Car
        • Home
        • Renters
        • Condo
        • Landlord
        • Boat & Yacht
        • Flood
        • Motorcycle
        • Travel
        • Pet
        • Weddings & Events
        • Umbrella
        • More
      • Prepare & Prevent
        • Insurance 101
        • Home Central
        • Travelers Garage
      • Affinity Group Discount
      • Online Service
      • Pay Your Bill
    • Get a home quote now

      It's easy to get a free quote for home insurance from Travelers in just a few minutes.

       

      Get a home quote now
  • For Business
      • Products & Solutions
        • Commercial Auto & Trucking
        • Cyber
        • General Liability
        • Management & Professional Liability
        • Property
        • Business Owner's Policy
        • Surety Bonds
        • Workers Compensation
        • More
      • Industries
        • Construction
        • Energy & Renewable
        • Financial Institutions
        • Healthcare
        • Manufacturing
        • Real Estate
        • Technology
        • Transportation
        • More
      • Prepare & Prevent
      • Services
        • Risk Control
        • Claim
        • Premium Audit
        • More
      • Pay Your Bill
      • Small Business
      • Large Business
      • Multinational Business
      • For Business Overview
    • Tips for Managing Risks Related to a Remote Workforce

      Tips for Managing Risks Related to a Remote Workforce

      With the current reality of more employees working from home through the pandemic, is your business ready for all the implications?

      Learn more
  • Claim Center
      • Claim Center
      • Should I File a Claim?
      • File a Claim
      • Roadside Assistance
      • Find a Service Provider
      • Check Your Claim Status
      • Manage Your Claim Experience
        • Understanding the Claim Process
        • Claim Guide Library
        • Workers Compensation Resources
      • Claim Capabilities
    • Send us your receipts, photos, invoices and more with just a push of a button.

      Securely share information with your Claim team.

      Send us your receipts, photos, invoices and more with just a push of a button.

      Upload a File
  • Prepare & Prevent
      • For Individuals
      • Home Central
        • Buying & Selling
        • Home Maintenance
        • Home Renovation
        • Home Safety
        • Moving
        • Smart Home
      • Travelers Garage
        • Buying & Selling
        • Car Maintenance
        • Distracted Driving
        • Safe Driving
        • Teen Driving
        • Boating
      • Insurance 101
      • Weather
      • For Business
      • Industries
        • Construction
        • Energy
        • Manufacturing
        • Nonprofit
        • Small Business
        • Technology
      • Topics
        • Business Continuity
        • Cyber
        • Driver and Fleet Safety
        • Facilities Management
        • Internet of Things
        • Product and Services Liability
        • Supply Chain Management
        • Workplace Safety
      • Travelers Risk Index
    • Managing Through COVID-19

      Managing Through COVID-19

      Resources to help you adapt to the realities of COVID-19.

      Learn more
  • Home
  • Prepare & Prevent
  • Business
  • Industries
  • Small Business
  • Small Business Insurance Glossary

Small Business Insurance Glossary

small business owner looking at computer small business owner looking at computer

Trying to understand how your small business insurance works, but having trouble with the language? We understand. Here are some of the more important terms to help you understand your policy.

Signing Up

  • Endorsement/Rider: Additional protection purchased in addition to your core business owners policy (BOP). You can use riders to add extra features to your policy.
  • Insurance Agent: Someone who sells insurance policies from one or more insurance companies.
  • Insured: The person or business, including employees and others, covered by an insurance policy.
  • Policy: A written contract, between the insurer and policyholder, that lays out the conditions of your insurance.
  • Premium: What you pay to your insurance company in exchange for coverage.
  • Quote: An initial estimate of how much your insurance will cost. The actual premium could be different.
  • Underwriting: A process where the insurance company reviews and evaluates your risks to decide whether you qualify for coverage, and at what premium.

Using Your Small Business Insurance

  • Appraisal: A professional estimate of the value of your property. The insurance company may require an appraisal during underwriting, or after you file a claim to calculate how much to pay for your loss.
  • Certificate of Insurance: A document that shows you have insurance and lists the types of policies you hold. It will also list the dates noting how long your coverage is in force.
  • Claim: When you notify your insurance company of a loss and request that they provide coverage that is covered by your policy.
  • Deductible: If you have a loss, this is the amount you’ll be required to pay before your insurance will start paying to cover a loss. For example, if you have a $2,000 deductible, you need to pay the first $2,000 of any loss before your insurance will pay out on a claim.
  • Grace Period: If you miss a premium payment, your insurer may give you a set amount of time (the grace period) to catch up before the policy is canceled.
  • Lapse: When your insurance policy has a gap in coverage, typically caused by a policyholder failing to pay the premiums to maintain the policy.
  • Loss: The financial cost of an incident, like damage to your car after an accident or a lawsuit from an upset client. Your insurance company may pay to cover the loss according to the conditions laid out in your policy.
       

Small Business Insurance 101: Frequently Asked Questions and Answers

If you're preparing to launch your own business, here are some frequently asked questions and answers to help you think it through and plan ahead.

Learn more
person checking laptop in small business person checking laptop in small business

   
What's Covered?

  • Actual Cash Value (ACV): The value of an asset after depreciation is factored in. Some insurance policies only cover the actual cash value of property after a loss. For example, the value of damage to a 5-year-old car will be less than that of a brand-new car due to depreciation from time and wear-and-tear. 
  • Depreciation: Wear and tear on property, like a car or equipment. Over time, these assets become less valuable because of the depreciation.
  • Exclusion: A situation where your insurance policy will not cover damages.
  • Named Peril Policy: An insurance policy that only covers the situations listed in the policy. Losses from anything else will not be covered.
  • Peril: Something that causes a loss. Fires, hurricanes and theft are examples of perils. It’s important to understand exactly which perils your coverage covers.
  • Policy Limit: The maximum amount your insurance will pay for a loss. The insurance company will not pay beyond the policy limit, even if your loss total was more than that.
  • Primary Policy: If you have multiple insurance policies covering the same situation, the company holding the primary policy will generally lead the claims handling process.
  • Replacement Value: The cost to replace damaged property. If a piece of equipment breaks, you likely will need to buy a brand-new one. A policy that covers replacement value will pay for this full cost, even if the actual value of your property is lower because of depreciation.

Types of Small Business Insurance

  • Business Interruption Insurance: If you have to temporarily close your business, such as to make repairs after a fire, business interruption insurance covers lost business income and ongoing expenses. This way, you can pay your bills during a time when you might not be earning income.
  • Business Owners Policy (BOP): This covers a broad range of property and liability risks. It can help protect your business in case of things like fire (property damage), suspended operations (business income) or lawsuits (liability) resulting from bodily injury, property damage, personal injury or advertising injury.
  • Commercial Auto: Insurance that covers driving a vehicle for your business. Your personal auto insurance policy may not cover losses from business use. A commercial auto policy covers physical damage and liability protection for vehicles registered to your business.
  • Cyber Insurance: This can be essential in helping your company recover after a data breach. This includes costs such as the disruption of your business, revenue loss, equipment damages, legal fees, public relations expenses, forensic analysis and costs associated with legally mandated notifications.
  • Liability Insurance: Liability insurance covers your legal defense costs and judgments if you are responsible (liable) for damages to someone else and could be sued.
  • Premises: The location or property, building(s) or land owned by the policyholder for example, that insurance coverage will apply to.
  • Professional Liability Insurance: Insurance that covers damages that come because of mistakes in your work, such as if you mishandle tax planning for a client, or poorly design a product. This is also known as errors and omissions insurance.
  • Umbrella Insurance: Insurance that covers losses that are higher than the policy limits on your other insurance plans. Once your other policy has paid to its limit, the umbrella insurance could cover any remaining costs.
  • Waiver of Subrogation: This prevents your business and your insurance company from seeking a share of any damages paid to a third party responsible for the loss for a paid claim.
  • Workers Comp Insurance: Insurance that covers your employees in case they get hurt on the job. These policies pay employee medical bills and replace their income when they are disabled from a workplace injury. The rules vary by state.
Learn More About Small Business Insurance

More Prepare & Prevent

Woman sitting in home office with cat on desk

How to Set Up Your Home Office

If you work from home, properly setting up your home office can help avoid painful injuries and time lost from work in the future.

Empty office

The Economics of Ergonomics for Small Businesses

When choosing new office furniture, consider how proper seating and workstations could offer significant cost savings in the long run.

Two young femail professionals sitting in open office

How to Plan Your Open Office

Planning to update the look and layout of your office? These questions can help you choose a design that works for your company.

Top Stories
Person using laptop in their small business

Small Business Insurance 101

Here are some frequently asked questions and answers to help you think it through and plan ahead.

  • Learn more

Related Content

  • Considering an Office Wellness Program?
  • Distractions in the Modern Small Business
  • Wearables Can Help Keep Your Small Business Employees Healthy

Related Products & Services

Business Owners Policy (BOP)

Combines property and liability insurance to provide a bundled, affordable solution that meets the general needs of your small business.


Workers Compensation

Provide benefits to your employees and protect your business when a work-related injury occurs.


Find Solutions

Discover products by industry:

Tailor your Solution


Find an Agent

Need an Agent?

Get the personal service and attention that an agent provides.

Find a local agent in your area:


For Agents

  • Agent Website
  • Become an Agent

See All Small Business Content


Travelers logo

Travelers and The Travelers Umbrella are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries.
© 2023 The Travelers Indemnity Company. All rights reserved.

  • Travelers on Facebook
  • Travelers on YouTube
  • Travelers on Twitter
  • Travelers on LinkedIn
  • Travelers on Instagram

Products & Services

  • For Individuals
  • For Businesses
  • Claim Services
  • Prepare & Prevent

Our Company

  • About Travelers
  • Careers
  • Investors
  • Sustainability
  • Travelers Institute

Connect

  • Customer Support
  • MyTravelers®
  • For Agents
  • Find an Agent

Legal & Compliance

  • Terms of Service
  • Privacy & Security
  • Cookie Settings
  • Accessibility
  • Producer Compensation Disclosure