Table of Contents
Insurance Terms Glossary
Insurance can be a complex topic, and understanding the industry’s language is crucial when it comes to making informed decisions about your coverage. A glossary of insurance terms is a valuable resource that can help you navigate the world of insurance and understand the specific words and phrases used by insurance providers. From “Actual Cash Value” to “Waiver of Premium,” having a clear understanding of key terms can help you make sense of your policy and ensure you have the right coverage for your needs. Whether you’re looking for car insurance, health insurance, or any other type of coverage, an insurance terms glossary is an essential tool for anyone looking to understand the industry.
Accident: An unexpected or unintended event that results in damage or injury.
Accounts Receivable Coverage: A type of insurance that helps to protect a business against the loss of income caused by the inability of customers to pay their bills.
Actual Cash Value (ACV): A measure of an asset’s worth that is calculated by subtracting depreciation from the replacement cost.
Additional Insured: A person or entity that is protected under an insurance policy in addition to the primary insured.
Additional Insured Endorsement: An endorsement added to an insurance policy that provides coverage for an additional insured.
Admitted Company: An insurance company that is licensed and authorized to do business in a particular state.
Advertising Injury: A type of liability coverage that is typically included in a general liability insurance policy. It helps protect a business against claims arising from advertising activities, such as libel or slander.
Agent: A person who represents an insurance company and sells insurance policies to customers.
Aggregate Limit: The maximum amount of coverage that an insurance policy will pay out over the policy period, regardless of the number of claims made.
Aircraft Insurance: A type of insurance that covers aircraft and their operators against accidents and other risks.
Audit: A review of financial records and transactions to ensure accuracy and compliance with regulations.
Automobile: A road vehicle with four wheels, typically powered by an internal combustion engine or an electric motor, and designed for the transportation of people or goods.
Automobile Insurance: A type of insurance that provides financial protection for car owners against losses caused by accidents, theft, and other risks. It can also provide liability coverage for accidents caused by the policyholder.
Binder: A temporary insurance contract that is issued to provide coverage on a short-term basis until a permanent policy can be issued.
Blanket Limit: A type of insurance policy that provides a fixed amount of coverage for a group of related items or properties, rather than individual limits for each item.
Bodily Injury: Physical harm or injury to a person, caused by an accident or other event.
Boiler and Machinery Insurance: A type of insurance that provides coverage for loss or damage to boilers and other machinery used in a business. It can cover the costs of repairs, replacement, and business interruption caused by the breakdown of the equipment.
Bond, Public Official: A type of surety bond that is required of certain public officials to ensure that they will perform their duties in compliance with the law and regulations.
Broker: An insurance professional who acts as an intermediary between insurance companies and policyholders, helping customers find the right coverage and negotiate terms with insurers.
Builder’s Risk Coverage: A type of insurance that provides coverage for loss or damage to buildings and other structures under construction. It can cover damage caused by weather, theft, and other risks.
Burglary: The unlawful entry into a building or other structure with the intent to commit a crime, typically theft.
Business Interruption: Loss of income that a business suffers as a result of an unexpected event, such as a fire or natural disaster. Business interruption insurance can help cover the costs of lost income during the period of interruption.
Cancellation: The act of terminating an insurance policy before the end of its term. It can be done by either the insurer or the policyholder.
Catastrophe: A large-scale disaster or event that causes significant damage, such as a natural disaster or major accident.
Certificate of Insurance: A document that verifies that a person or organization has an insurance policy and shows the coverage details.
Claim: A request for payment or compensation made to an insurance company by a policyholder or third party.
Claimant: A person who makes a claim for payment or compensation under an insurance policy.
Claims Made Coverage: A type of insurance coverage that provides protection for claims made during the policy period, regardless of when the event that caused the claim occurred.
Claims Management: The process of handling insurance claims, which includes assessing the claim, determining coverage, and paying out benefits.
Coinsurance Penalty: A penalty imposed by an insurance company on a policyholder who does not have enough insurance coverage to meet the policy’s coinsurance requirement.
Collision (Auto): A type of accident that occurs when a vehicle collides with another vehicle or object.
Collision Coverage: An optional type of automobile insurance that covers damage to a policyholder’s vehicle in the event of a collision.
Collision Deductive Waiver: An optional endorsement to an auto insurance policy that waives the policyholder’s collision deductible in certain circumstances, such as when the other driver is at fault.
Common Carrier Liability: Liability insurance that covers common carriers, such as buses, trains and taxis, for injuries suffered by passengers while on the carrier’s premises or while being transported by the carrier.
Comprehensive (Auto): A type of auto insurance that covers damage to a policyholder’s vehicle from non-collision related events, such as theft, fire, or natural disasters.
Comprehensive Coverage: A type of insurance that covers a wide range of risks, such as damage from fire, theft, or other perils.
Comprehensive Glass Insurance: A type of coverage that covers the cost of repairing or replacing glass on a vehicle, such as windshields, mirrors, and windows.
Conditions: The terms and limitations of an insurance policy that outline the insurer’s obligations and the policyholder’s rights.
Contractual Liability: Liability that arises from an agreement or contract, as opposed to from an act or omission.
Credit Life Insurance: A type of insurance that pays off a policyholder’s outstanding loan balance in the event of death, to help protect their family and dependents from financial hardship.
Crime Coverage: A type of insurance that provides protection against losses resulting from criminal acts, such as theft, embezzlement, or fraud.
Damages: Money paid by an insurer to a policyholder or a third party as compensation for loss, injury, or harm caused by an insured event.
Declarations: A section of an insurance policy that summarizes the key terms and conditions of the coverage, such as the policyholder’s name and address, the policy period, and the types and amounts of coverage.
Decline: The act of an insurance company refusing to accept a risk or refusing to renew an insurance policy.
Deductible: The amount of money that a policyholder must pay out of pocket before their insurance coverage begins to pay for a loss or claim.
Defendant: A person or organization against whom a legal claim is made or a legal action is taken.
Defense Coverage: A type of insurance that provides coverage for the costs of defending against a legal claim, such as attorney fees and court costs.
Demolition Coverage: A type of insurance that covers the cost of demolishing a damaged or uninhabitable structure.
Depreciation: The decrease in value of an asset over time due to wear and tear, age or other factors.
Disability Insurance: A type of insurance that provides financial support to individuals who are unable to work due to an injury or illness.
Discovery Period: A period of time following the filing of a legal claim during which both parties can gather information and evidence in preparation for trial. This period varies depending on jurisdiction and type of claim.
Endorsements: Additional provisions added to an insurance policy that modify or expand the coverage provided by the policy.
Environmental Impairment Liability: A type of liability insurance that covers the cost of resolving environmental claims arising from the policyholder’s business activities.
Equipment Breakdown Insurance: A type of insurance that provides coverage for loss or damage to equipment used in a business, such as machinery or electronics.
Errors and Omissions Coverage: A type of insurance that provides protection for professionals against claims arising from mistakes or omissions in their work. It’s also called professional liability insurance.
Excess Liability Insurance: A type of insurance that provides additional coverage above and beyond the limits of a primary policy.
Exclusions: Provisions in an insurance policy that specify types of losses or events that are not covered by the policy.
Experience Modification Factor: An adjustment made to an employer’s workers’ compensation insurance rate based on their claims history. It’s a ratio of an employer’s expected losses to their industry’s average losses.
Expiration Date: The date on which an insurance policy will end, unless it is renewed.
Extended Loss Reporting Period (“TAIL”): An option on some professional liability policies, that gives policyholders more time to report claims after the policy has expired.
Extra Expense Coverage: A type of insurance that covers the additional costs incurred as a result of a loss, such as the cost of renting temporary equipment or relocating a business.
Face Amount: The amount of money that will be paid by an insurance policy in the event of a claim, such as the death benefit of a life insurance policy or the face value of a bond.
Fidelity Bond: A type of insurance that protects an employer against losses caused by the dishonesty or fraud of its employees.
Financial Guarantee Insurance: A type of insurance that guarantees payment of a financial obligation in the event of a specified event, such as a bond default.
Fine Arts: Valuable works of art, such as paintings, sculptures, and antiques.
Fire Insurance: A type of insurance that covers losses caused by fire. It can include coverage for the structure of a building, as well as the contents inside.
Forgery or Alteration Coverage: A type of insurance that covers losses caused by forgery or alteration of important documents, such as checks or securities.
Garagekeepers Legal Liability: A type of insurance that covers a garage or repair shop owner for losses suffered by customers whose vehicles or property are damaged while in the care, custody, or control of the garage.
Good Driver Discount: A type of discount on an auto insurance policy offered to policyholders who have a good driving record.
Grace Period: A specified period of time, usually a few days, during which a policyholder can pay their insurance premium without penalty. If the premium is not paid within the grace period, the policy may lapse or be cancelled.
Guaranteed Insurability: A feature of some insurance policies that allows the policyholder to purchase additional coverage at a later date without having to provide additional medical information or evidence of insurability.
Hard Market: A market condition in which insurance companies are more selective in the risks they are willing to insure, and rates are generally higher. This can happen due to an increase in claims or natural disasters that lead to losses for insurance companies
Health Insurance: A type of insurance that covers the cost of medical care. Health insurance policies can be offered by employers or purchased by individuals, and can vary in terms of the services covered and the amount of out-of-pocket expenses for policyholders.
Hold Harmless Agreement: An agreement in which one party agrees to hold the other party harmless from any losses or damages that may arise from an activity or event. It’s commonly used in construction and property management
Homeowner Insurance: A type of insurance that provides financial protection for homeowners against losses caused by fire, theft, and other perils. It typically includes coverage for the structure of the home as well as personal property, and may also provide liability protection in case someone is injured on the property.
Immunity: A legal protection from prosecution or from being held liable for damages. It can be granted by the government or by a court.
Incontestable Clause: A provision in an insurance policy that states that the insurance company cannot contest the validity of the policy after a certain period of time, usually two years, after the policy has been issued.
Incurred But Not Reported (IBNR): Losses that an insurance company is aware of, but have not yet been reported to them.
Indemnification Agreement: An agreement between two parties in which one party agrees to compensate the other party for any losses or damages they may incur as a result of a specific event or activity.
Indemnify: To provide financial compensation to another party for loss or damage suffered.
Insurable Interest: The requirement that a person or organization has a financial interest in a property or risk that they wish to insure, to avoid any moral hazard.
Insurance: A type of financial product that provides financial protection against losses or damages caused by specific events.
Insurance Policy: A legal contract between an insurance company and a policyholder that outlines the terms and conditions of the coverage provided.
Insured: A person or organization that has purchased an insurance policy.
Insurer: An organization that provides insurance coverage.
Intentional Acts: Actions that are taken with a specific intent or purpose, as opposed to those that are accidental. Some insurance policies exclude coverage for losses caused by intentional acts, or for criminal activities.
- Joint and Several Liability: A legal concept that holds multiple parties responsible for paying the full amount of damages in a liability claim, regardless of their individual level of responsibility. Under joint and several liability, each party is held responsible for paying the full amount of damages, and the other parties are then required to reimburse their share of the amount to the party that paid the full amount. This concept is commonly used in cases where there are multiple defendants, and it allows the plaintiff to recover the full amount of damages even if one or more of the defendants are unable or unwilling to pay.
Legal Insurance: A type of insurance that helps cover the costs of legal representation and related expenses for individuals and businesses. It can include coverage for defense in lawsuits, arbitration proceedings and other legal actions.
Liability: The legal responsibility for damages or losses that may occur as a result of one’s actions or omissions.
Liability Insurance: A type of insurance that provides financial protection against losses or damages that one may be held legally liable for. It can include coverage for bodily injury, property damage, and other types of losses.
Life Insurance: A type of insurance that provides a death benefit to the beneficiary in the event of the policyholder’s death.
Limit: The maximum amount of coverage that an insurance policy will pay out for a specific loss or claim.
Limit of Liability: The maximum amount of money that an insurance company will pay for a claim, as specified in the policy.
Loan Value: The amount of money that the policyholder can borrow against a cash value life insurance policy.
Loss Control: The practice of identifying and managing risks in order to prevent or minimize losses.
Loss Payable Clause: A provision in an insurance policy that allows the policyholder to name a third party, such as a bank or lender, as the payee of any insurance claims.
Loss Ratio: A ratio that compares the amount of money paid out in claims to the amount of premium income earned by an insurer. In general, a lower loss ratio indicates that an insurer is pricing policies appropriately and providing adequate coverage, while a higher loss ratio suggests that an insurer may be pricing policies too low or not providing adequate coverage. It is used as a measure of an insurer’s profitability and overall financial performance.
Marine Insurance: A type of insurance that covers losses or damages to ships, cargo, and other maritime-related property. It can also provide protection for liabilities that may arise from shipping or transport of goods.
Material Misrepresentation: A false or incomplete statement provided by an insurance applicant or policyholder that is significant enough to affect the insurer’s decision to issue a policy or accept a claim.
Medical Payments: A type of insurance that provides coverage for medical expenses resulting from an accident, regardless of who was at fault.
Miscellaneous Insurance: A type of insurance that covers specialized or unique risks that may not fall into traditional insurance categories. It can include coverage for things like pet insurance, event cancellation insurance, and identity theft protection.
Misquote: An error in an insurance quote, such as an incorrect price or coverage level.
Mobile Equipment: Vehicles or equipment that are designed for mobility and are not permanently affixed to a specific location, such as construction equipment or delivery trucks.
Mortgage Insurance: A type of insurance that provides protection to a lender in the event that a borrower defaults on a mortgage loan. It can also provide protection to a borrower who is unable to make mortgage payments due to certain events such as disability or death.
Named Insured: The individual or organization that is specifically identified as the insured party in an insurance policy. Additional individuals or entities may also be included as insured parties under certain circumstances, but the named insured is the main party that the policy covers.
Negligence: A legal term referring to the failure to exercise reasonable care, resulting in harm or damage to another party. In the context of insurance, negligence can refer to a policyholder’s failure to take reasonable precautions to prevent a loss, which can result in a denied claim. It also refers to the legal principle of liability that is used to determine fault in personal injury cases, such as a car accident, or in professional liability cases. The principle of negligence is typically the basis for determining liability for damages.
Occurrence: In the context of insurance, an occurrence is an event or series of events that gives rise to a claim for insurance coverage. This can refer to a variety of different types of incidents, such as a car accident, a natural disaster, or a fire.
Occurrence Basis: This refers to a type of insurance policy that provides coverage for claims arising from events or occurrences that take place during the policy period, regardless of when the claim is actually made. This is in contrast to a “claims-made” policy, which only provides coverage for claims that are made during the policy period.
Offense: In insurance, the term “offense” refers to a wrongful act, such as fraud or embezzlement, committed by an insured party that results in a loss to the insurer. This type of event is not covered under standard insurance policies and would require a specialized coverage known as Crime Insurance.
Other Insurance Clause: This is a provision found in many insurance policies that sets out what happens when an insured party has more than one insurance policy that might cover the same loss. The “other insurance” clause usually states that the policies will work together to provide coverage, but that the insured party can only collect a maximum amount equal to the full value of the loss. This means that an insurer will not pay more than its policy limits, even if the loss is covered by more than one policy.
This provision helps avoid double recovery of the damages.
Perils: In insurance, perils refer to the specific risks or hazards that are covered under a particular policy. For example, a homeowner’s insurance policy may cover perils such as fire, theft, and damage from natural disasters. Different types of insurance policies cover different perils, and it’s important for policyholders to understand which perils are covered under their policy.
Personal Injury: Personal injury refers to harm to a person’s physical or emotional well-being, as opposed to damage to property. Personal injury insurance policies can provide coverage for a variety of different types of injuries, such as medical expenses, lost wages, and pain and suffering.
Personal Property: Personal property refers to any property that is owned by an individual, as opposed to property that is owned by a business or organization. Personal property insurance policies can provide coverage for a wide range of items, such as furniture, clothing, and electronics, against perils such as fire, theft, and damage from natural disasters.
Personally Liable: In insurance, the term “personally liable” refers to a situation in which an individual is held legally responsible for damages or losses that are caused by their actions. For example, if someone is personally liable for a car accident, they may be held responsible for paying for any damages or injuries that result from the accident.
Plaintiff: A plaintiff is a person or party that brings a legal action or lawsuit against another person or party, usually the defendant. In insurance context, the plaintiff is usually the party that suffers the damages and seeks compensation from the insurer of the party that caused the damage.
Policy: In insurance, a policy is a legal contract between an insurance company and an individual or organization that sets out the terms and conditions of the insurance coverage. A policy typically includes information such as the types of risks that are covered, the policy limits, and the exclusions.
Policy Limit: Policy limit refers to the maximum amount of money that an insurance company will pay out under a particular policy in case of a loss. This limit is set at the time the policy is issued and it is not exceedable.
Premium: A premium is the regular payment that an individual or organization makes to an insurance company in order to maintain an insurance policy. Premiums are usually paid on a monthly or annual basis and are calculated based on factors such as the type of policy, the amount of coverage, and the level of risk.
Premium Financing: Premium financing refers to the process of borrowing money from a lender to pay for an insurance premium. This can be an option for individuals or businesses who want to purchase insurance but may not have the funds available to pay the premium up front.
Prior Acts (Nose Coverage): Nose coverage is an insurance term which refer to prior and pending claims, incidents or circumstances that occured before the start date of a policy. A policy with Nose Coverage is intended to protect the insured against claims that are made after the policy starts, but that relate to events that happened before the policy was in place.
Pro-Rata Cancellation: Pro-rata cancellation refers to a method of canceling an insurance policy before its expiration date. Under this method, the insurer will calculate the amount of premium that the policyholder has paid for the time remaining on the policy, and refund the proportionate amount.
Products Liability: Products liability refers to a manufacturer’s or seller’s legal responsibility for any injuries or damages caused by a defective product that they have manufactured, designed or sold. Products liability insurance helps to protect businesses from liability claims that result from a defect in their products.
Proof of Loss: In insurance, proof of loss refers to the documentation or evidence that is required by an insurance company to process and pay out a claim. This might include things like police reports, medical bills, or repair estimates, depending on the type of claim.
Property: In insurance, property refers to the physical assets that are owned by an individual or organization, such as a house, car, or personal possessions. Property insurance policies can provide coverage for these assets against a variety of perils, such as fire, theft, and damage from natural disasters.
Property Damage: Property damage refers to harm to or destruction of a physical property, such as a car or building. This type of loss is usually covered by a property insurance policy.
Property Insurance: Property insurance refers to any type of insurance that provides coverage for damage to or loss of property, such as homeowners insurance, renters insurance, and commercial property insurance.
Punitive Damages: Punitive damages refers to a monetary award that a court may impose to punish a party for particularly egregious or outrageous conduct. This type of damages is generally not covered under liability insurance policies, it is meant to discourage the wrongdoer from repeating the same act.
Reinstatement: In insurance, reinstatement refers to the process of restoring a policy to its original condition after it has been canceled or has lapsed. This may involve paying any outstanding premium balances, and any other requirement set by the insurer. Reinstatement can also mean restoring a limit of insurance or coverage that has been used during a claim.
Reinsurance: Reinsurance refers to an insurance company transferring some or all of the risks of its policyholders to another insurance company in order to spread the risk and reduce the potential losses. It is a way for insurance companies to manage the risks of providing coverage to their policyholders by sharing the potential losses with other insurers.
Reinsurer: A reinsurer is an insurance company that provides reinsurance to another insurance company. Reinsurers typically specialize in certain types of coverage, such as large commercial risks or catastrophe coverage.
Relative Loss Ratio: The relative loss ratio is a measure of an insurance company’s performance. It’s calculated by dividing the claims paid plus loss adjustment expense, by the premium earned. It is a way for insurance companies to compare their performance with their peers, and it’s usually used to indicate the company’s underwriting performance
Replacement Cost: Replacement cost refers to the amount of money that it would take to replace or repair an insured property or item at current prices, without considering any depreciation. Replacement cost is often used as a benchmark for determining the amount of coverage needed under a property insurance policy.
Replacement Value: Replacement value refers to the cost of replacing or repairing an insured property or item, taking into account the depreciation.
Retention: Retention refers to the amount of risk that an insurance company chooses to keep on its own balance sheet, rather than transferring it to a reinsurer. This is also known as a “self-insured retention” and it’s the amount of risk that a company is willing to bear before it purchases reinsurance.
Retroactive Date: In insurance, a retroactive date refers to a date that is set in the policy, before which no coverage applies. It is used to limit the insurance company’s liability for claims that arise from events that occurred before the retroactive date.
Rider: A rider is an addendum to an insurance policy that modifies or expands the coverage provided by the policy. Riders can be added to a policy to provide additional coverage for specific risks or perils that are not covered under the main policy.
Risk: Risk refers to the likelihood of a loss or an adverse event occurring. In insurance, risk is evaluated in order to determine the likelihood of a loss and the potential cost of that loss, which is used to calculate the premium for a policy.
Risk Assessment: Risk assessment refers to the process of evaluating the likelihood and potential impact of a loss or adverse event. This process is used by insurance companies to determine the level of risk associated with insuring a particular individual, property, or business.
Risk Management: Risk management refers to the process of identifying, assessing, and mitigating risks in order to minimize the potential impact of a loss or adverse event. This process is used by insurance companies to minimize their exposure to risk and to manage their claims and expenses.
Risk Management Committee: A risk management committee is a group of individuals within an insurance company who are responsible for overseeing the risk management process. They are responsible for monitoring and managing the company’s exposure to risk and for identifying and implementing risk management strategies.
Risk Management Program: A risk management program refers to a set of processes, practices and procedures used by an insurance company to identify, assess, and mitigate risks. This program can include a wide variety of different strategies and tactics, such as loss prevention, risk financing, and claims management. The ultimate goal of a risk management program is to minimize the potential impact of losses and to improve the overall financial stability of the company.
Risk Retention: Risk retention refers to the concept of an individual or company keeping or retaining a portion of the risk of loss themselves rather than transferring it to an insurance company. This can be done through self-insurance or retention of a portion of the risk through a reinsurance contract
Risk Transfer or Sharing: Risk transfer or sharing refers to the concept of transferring or sharing the risk of loss from one party to another, typically through the purchase of insurance. Insurance allows individuals and companies to transfer the risk of loss to an insurance company, who then bears the financial burden in the event of a loss.
Risk of Direct Physical Loss: The term direct physical loss refers to a specific type of property damage that can be seen, touched or otherwise perceived. Examples include property damage caused by fire, wind, theft, or vandalism. Insurers will typically cover direct physical loss but may exclude certain risks or perils, such as wear and tear, termites or earth quakes.
Self Insurance: Self insurance refers to an individual or company taking on the financial risk of potential losses or damages rather than transferring that risk to an insurance company. This can be done through setting aside funds or reserves to cover the potential loss or retaining a portion of the risk through a reinsurance contract. Self-insurance can be a cost-effective way for some businesses and organizations to manage risk.
Short-Rate Cancellation: Short-rate cancellation refers to a method of canceling an insurance policy before its expiration date. Under this method, the insurer will calculate a cancellation fee, which is typically a percentage of the total premium, based on the time remaining on the policy. This fee is usually higher than pro-rata cancellation, as a penalty for the early termination.
Soft Insurance Market: A soft insurance market refers to a market condition where there is an excess of capacity and a lack of underwriting discipline, resulting in lower prices and more competitive conditions for consumers. In a soft market, there are more insurance companies competing for business, which drives down prices and results in more favorable terms and conditions for policyholders.
Solicitor: A solicitor refers to an individual or organization that attempts to sell insurance policies to potential customers, typically by contacting them directly or through cold calling.
Special Endorsement: A special endorsement refers to an amendment or addition to an insurance policy that modifies or expands the coverage provided by the policy. These endorsements are used to provide coverage for specific risks or perils that are not covered under the main policy.
Special Events Insurance: Special events insurance refers to a type of insurance that provides coverage for specific events or activities, such as weddings, concerts, or festivals. This type of insurance can provide protection against a variety of risks, such as cancellations, weather-related losses, or injuries to attendees.
Sprinkler Insurance: Sprinkler insurance refers to insurance that covers damage caused by the activation of a building’s fire sprinkler system. This type of insurance is typically included in a commercial property insurance policy, but it can also be purchased as a separate policy.
Standardized Form: A Standardized Form is an insurance contract that follows a standard format and language established by an industry organization or a government agency. This can make it easier for policyholders to understand and compare different insurance options.
Stop Loss: Stop loss insurance refers to coverage that provides protection to a self-insured entity or a group health plan sponsor against potentially large claims. It’s designed to protect the insured party against catastrophic claims, and limit the financial impact of large claims by providing coverage over a certain threshold.
Subrogation: Subrogation refers to the legal right of an insurance company to pursue a third party who is responsible for causing the loss or damage that is covered by the insurance policy. This allows the insurance company to recover some or all of the money that it has paid out on a claim.
Surcharge: A surcharge refers to an additional charge or fee that is added to an insurance premium. This can be added for a variety of reasons, such as an increase in the level of risk or a violation of the terms of the policy.
Surety: Surety refers to a type of insurance that provides a financial guarantee for the performance of a contract or the payment of a debt. This can include things like performance bonds, payment bonds, and other types of financial guarantees.