All the Insurance Terms you'll ever need

An index of insurance terms and short definitions to help you with buying and managing your insurance policy. Keep it in your back pocket as your secret weapon to navigate this complex area.

FEIN Number

A FEIN number, also called a Federal Employer Identification Number, is a unique, nine-digit number assigned by the IRS to all U.S. businesses. A FEIN number is used for the purpose of identification. It lets businesses report financial information to the government in a similar way to how people use their Social Security number.

Ghost Policy

A workers’ comp ghost policy exists purely for proof of insurance and provides no actual coverage. It’s used by individual contractors who need to demonstrate they have workers' compensation coverage to win a contract or to meet state requirements, despite not having any employees.

Indemnity

Indemnity is the principle where an insured person or company is restored to the same financial position as they were in before some sort of loss occurred.

Loss Cost Multiplier

A loss cost multiplier (LCM) modifies base loss costs, which are an estimate of expected claims losses for every industry. LCM is used by insurance companies to calculate the final premium rate for policyholders.

Loss Payee

A loss payee on an insurance policy is a person or organization who has a financial interest in the insured property. In the event of a claim where the property is damaged or lost, the loss payee receives payments before the policy holder.

Loss Ratio

A loss ratio in an insurance policy is one of the most common metrics used by insurance companies. It determines how risky and profitable their policies are.

Loss Runs

A loss run report records the history of claims made against a business insurance policy. It is similar to an incident report as you might keep for management records. When looking for new business insurance coverage, you can provide the report to prospective insurance companies. Underwriters can use loss runs to determine how risky your company will be to insure. If there were no claims, these documents would state that there were none. Loss runs can be obtained by requesting them directly from the carrier with whom the policy was issued or by contacting the agent who sold you the policy.

Premium

An insurance premium is what you pay to the insurance company for your coverage. You make this payment regularly—monthly, quarterly, or yearly. In this article, we'll break down the details, exploring the definition, factors affecting costs, and why premiums matter in the broader insurance picture.

Quote

A quote in insurance is an estimate of the cost of insurance and is an important preliminary step on the way to getting insurance coverage. However, there can be challenges to getting insurance quotes, especially for businesses, and steps should be taken to get through the process quickly and efficiently.

Risk Management

Risk management in small business involves identifying, assessing, and preventing risks that could potentially affect the financial health of a company. Risk management is crucial for addressing the various uncertainties involved in running a business.

All the Insurance Terms you'll ever need

FEIN Number

Ghost Policy

Indemnity

Loss Cost Multiplier

Loss Payee

Loss Ratio

Loss Runs

Premium

Quote

Risk Management

Ready for easy and accurate workers' comp?

The Ultimate Guide to Workers' Comp Insurance

Top Professions

Top States

Small Business Insurance

Resources/Education

Company