Insurance glossary
The insurance terms sellers actually meet.
Amazon, Walmart, and wholesale buyers throw insurance jargon at sellers and expect you to just know it. Here it is in plain English, with why each one matters for your store.
Additional Insured
An additional insured is a person or company added to your policy so they also receive its protection for claims connected to your business. Marketplaces and retailers require it so that if a product you sold leads to a claim, your insurance can respond on their behalf too, not only yours.
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Business Owners Policy (BOP)
A Business Owners Policy (BOP) bundles general liability with commercial property coverage, and sometimes business interruption, into one packaged policy for small businesses. It is a convenient base for sellers who also need to insure inventory, equipment, or a location, on top of product liability.
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Certificate of Insurance
A Certificate of Insurance (COI) is a one-page document that proves your policy exists and states its coverages, limits, and effective dates. It does not change the policy; it is evidence of it. Marketplaces, wholesale buyers, and retailers request a COI, often naming themselves as additional insured, before they will work with you.
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Commercial General Liability (CGL)
Commercial General Liability (CGL) is the standard business liability policy covering third-party bodily injury, property damage, and personal and advertising injury, including products and completed operations. It is the form most marketplace and buyer insurance requirements refer to when they ask sellers for liability coverage.
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Deductible
A deductible is the amount you pay out of pocket on a covered claim before your insurance pays the rest. A higher deductible usually lowers your premium but increases what you owe per claim. Some marketplaces cap how high a seller's deductible can be.
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General Liability Insurance
General liability insurance, often written as Commercial General Liability (CGL), covers third-party bodily injury, property damage, and personal or advertising injury arising from your business operations. It is broader than product liability and usually includes product and completed-operations coverage within the same policy for eCommerce sellers.
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Named Insured
The named insured is the person or business the policy is issued to and whose name appears on the declarations and any certificate. It is the primary party with rights and duties under the policy. On a COI, the named insured must match the legal entity a marketplace has on file for your seller account.
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Occurrence vs Claims-Made
An occurrence policy covers incidents that happen during the policy period, no matter when the claim is filed. A claims-made policy only covers claims both arising and reported while the policy is active. For product sellers, occurrence-based coverage is usually preferred because product claims can surface years after a sale.
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Per-Occurrence and Aggregate Limits
A per-occurrence limit is the most an insurer pays for any single claim; the aggregate limit is the most it pays in total across the whole policy period. A policy written as $1,000,000 / $2,000,000 pays up to $1M per claim and $2M for all claims combined during the term.
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Product Liability Insurance
Product liability insurance covers claims that a product you sold caused bodily injury or property damage to a third party. It pays legal defense costs, settlements, and judgments up to the policy limit. For eCommerce sellers it is the core coverage, because you remain responsible for your products even when a marketplace lists them.
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Products-Completed Operations
Products-completed operations coverage handles claims for bodily injury or property damage that happen away from your premises after a product has left your hands or a job is finished. For sellers, it is the part of liability coverage that responds once a customer already has and is using the product.
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Waiver of Subrogation
Subrogation is your insurer's right to recover money from a third party who caused a loss it paid for. A waiver of subrogation gives up that right against a specific party, usually one you contract with. Retailers and marketplaces sometimes require it so your insurer cannot later pursue them.
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