Insurance glossary

Whether you run a pub, salon, trade business or medical practice, the same insurance phrases appear again and again. This glossary explains what they mean in practice — not legal advice, but a useful starting point before you speak to an adviser or get a quote on one of our specialist sites.

Cover types

Public liability insurance

Covers compensation and legal costs if a member of the public (not your employee) is injured or their property is damaged because of your business activities. Essential for most customer-facing businesses; often required by landlords and main contractors.

Employers liability insurance

Covers claims from employees injured or made ill through work. Legally required for most UK employers with staff. Minimum cover is £5 million; certificates must be displayed where employees can see them.

Professional indemnity insurance

Protects against claims that your professional advice, design or service caused a client financial loss. Often required by regulators and client contracts. Complements public liability — it does not replace it.

Business interruption insurance

Replaces lost income and helps pay ongoing costs when an insured event (such as fire or flood) stops you trading. Usually bought with property insurance; indemnity period and sum insured need careful review.

Policy excess explained

The amount you pay towards a claim before the insurer pays the rest. Compulsory and voluntary excesses combine on many policies. Higher excesses can lower premium but increase your cost when claiming.

Other terms you may see

• Sum insured — the maximum the insurer will pay under a section, or the value you declare for property or BI
• Indemnity period — how long business interruption benefits are paid after a claim
• Claims-made — cover responds when the claim is notified during the policy period (common for PI)
• Run-off cover — PI extension after you stop trading to cover future notifications
• Loss adjuster — specialist appointed by the insurer to investigate and agree property or BI claims
• Under-insurance / average — if sums insured are too low, insurers may pay only a proportion of the loss

Guides & resources

Looking for broader help? See our insurance resources hub for step-by-step guides on choosing cover, making a claim and how UK insurance is regulated.

Ready to compare cover for your trade or profession? Visit the specialist site that matches your business from our about us page, or get in touch and we will point you in the right direction.