Business Insurance Glossary: Terms to Know Before You Buy
Look up business insurance terms that affect coverage, provider roles and what to confirm before you buy.
Admitted vs Non-Admitted Insurance
An insurer’s admitted status depends on whether it is licensed where your risk is located; state protections after an insurer failure can differ.AM Best Rating
An AM Best Financial Strength Rating is an opinion about a named insurer’s ability to meet policy obligations, not a guarantee that a specific claim will be paid.
Fronting Carrier
In a fronting arrangement, the company named on your policy issues it and usually handles your claim, even when it transfers risk to a reinsurer.Full-Stack Insurance Provider
A full-stack insurance group sells coverage and carries or underwrites risk through related companies; the seller and claims-paying insurer can differ.
Insurance Broker
A broker is licensed to shop the market on your behalf rather than represent one insurer, but the title alone doesn't tell you which company will actually issue your policy.Insurance Carrier
The carrier is the insurer legally responsible for paying claims, the name on your policy rather than the brand you shopped with. It can be an admitted insurer or a surplus-lines insurer, depending on the state.Insurance Producer License
A producer license permits a person or firm to sell specified lines of insurance in a state; it does not make that seller the insurer.
NAIC Complaint Index
The NAIC complaint index measures confirmed, closed complaints against a carrier relative to its size, useful for comparing insurers but not a full measure of claims or service quality.National Producer Number
A National Producer Number is a nationwide ID for looking up a producer's licensing record. It isn't proof that the license is currently active, so confirm status separately.
Reinsurance
Reinsurance lets an insurer share risk with another insurer; your claim generally goes to the insurer named on your policy.Risk-Based Capital
Risk-based capital measures whether an insurer meets a regulatory minimum for its size and risks; it does not rank insurers or predict claim outcomes.
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