Most of the definitions below are provided courtesy of the Insurance Institute of Canada. Definitions provided by the Insurance Bureau of Canada are indicated with an asterisk ("*").
The language of insurance can be confusing due to the complexity of the wordings. Below are some commonly used insurance terms and their meanings. Insurance professionals with whom you may come into contact should be prepared to explain these terms. If you don't understand, ask!
This information is for educational purposes only and should not be relied upon to form professional opinions on coverage issues.
Bad Faith
1) Design to deceive or mislead another.
2) Conscious wrongdoing.
3) Constructive fraud.
Bailee
In contract and property law one to whom goods or property are entrusted for a stated purpose. Can be either gratuitous (for no consideration) or for hire (for consideration).
Bailor
A person entrusting goods to another.
Basic insurance policy*
See Named Perils.
Betterments
Physical improvements beyond mere maintenance or repairs that augment the value of a property.
Binder*
A temporary or preliminary agreement that provides coverage until a policy can be written or delivered.
Blanket Crime Policy
An individual policy covering several crime perils on a single amount rather than on individual limits.
Blue Book Value
The Blue Book lists the values of automobiles. Insurers typically use this book to establish the amount of loss in automobile physical damage claims. These values are synonymous with market value. See also Red Book.
Bodily Injury*
A term, mostly used in automobile insurance, meaning physical injury as a result of a car collision.
Boiler and Machinery Insurance*
This coverage protects an organization against any losses that result from a breakdown of heating, refrigeration, air conditioning equipment, pressure vessels, boilers, production machinery, electrical apparatus and/or electronic equipment
Branding*
A car is branded after an accident to indicate its state of disrepair as one of the following:
Salvage - A vehicle that has sustained damage to the point where the cost of fixing it exceeds its cash value prior to the damage.
Irreparable - A vehicle that is incapable of safe highway operation, has sustained damage beyond repair and is only used for parts.
Rebuilt - A vehicle that was severely damaged but has been repaired and inspected and met rigorous determined standards.
Stolen - A vehicle that has been stolen from its owner. Only the police can apply or remove this brand.
Broad coverage*
This provides comprehensive insurance coverage for buildings and named perils coverage for contents.
Breach
Failure to live up to the conditions or warranties contained in a policy.
Broker*
An insurance broker sells insurance for more than one company.
Builders Risk Insurance*
Insurance coverage on property under construction, including loss to temporary buildings, materials and supplies necessary to complete the construction project.
Burglar Alarms
Devices of various types which give warning of entry into premises by unauthorized persons.
Burglary
Unlawful removal of property from premises involving visible forcible entry.
Burglary Insurance
Insurance against loss of property caused by burglars.
"Buy back" Deductible
A deductible which may be removed by payment of additional premium when full coverage is required.
Business Insurance*
Insurance purchased by businesses, also called "commercial insurance". Includes several types: property, boiler and machinery, liability (professional liability, product liability, directors and officers liability), commercial auto, business interruption, etc.
Business Interruption Insurance*
Various types of insurance against business expenses and loss of income resulting from a fire or other insured peril.
By-law Endorsement
An endorsement explaining how a particular insurance company deals with a claim which is affected by a local by law.