Running a small business means juggling a lot—including understanding insurance terms that can feel like a foreign language. At Goodrich & Watson Insurers, we’re here to help make things clear. Below is a glossary of essential terms every business owner should know when it comes to small business insurance in Virginia.
Getting Started with Coverage
Endorsement / Rider
Additional protection purchased in addition to your core business owner’s policy (BOP). You can use riders to add extra features to your policy.
Insurance Agent
A licensed professional—like the team at Goodrich & Watson—who helps you find and manage coverage from one or more insurance carriers.
Insured
The individual or business (and often employees) covered by the insurance policy.
Policy
The legal agreement between you and the insurance company detailing what’s covered and under what terms.
Premium
What you pay to your insurance company in exchange for coverage.
Quote
An estimate of how much your insurance may cost, based on your unique risk profile and coverage needs.
Underwriting
A process where the insurance company reviews and evaluates your risks to decide whether you qualify for coverage, and at what premium.
Using Your Insurance
Appraisal
A professional estimate of the value of your property. The insurance company may require an appraisal during underwriting, or after you file a claim to calculate how much to pay for your loss.
Certificate of Insurance (COI)
Proof that you have active insurance. Often required by clients, vendors, or landlords.
Claim
A formal request you submit to your insurer after a loss, asking for coverage according to your policy terms.
Deductible
If you have a loss, this is the amount you’ll be required to pay before your insurance will start paying to cover a loss. For example, if you have a $2,000 deductible, you need to pay the first $2,000 of any loss before your insurance will pay out on a claim.
Grace Period
A window of time after a missed payment where your coverage remains active before cancellation.
Lapse
A break in coverage, often due to non-payment. A lapse can make it harder to get coverage later and may leave you exposed.
Loss
The financial impact of an incident—such as property damage, theft, or a lawsuit—that may be covered by your policy.
Types of Small Business Insurance
Business Interruption Insurance
Covers lost income and operating expenses if your business has to shut down temporarily due to a covered event, like a fire.
Business Owner’s Policy (BOP)
A bundled policy that typically includes property, liability, and business interruption coverage—ideal for many small businesses.
Commercial Auto Insurance
Covers vehicles used for business purposes. Personal auto policies typically don’t cover business-related claims.
Cyber Insurance
Protects against data breaches and cyberattacks. It may cover data loss, legal fees, notification costs, and more.
Liability Insurance
Covers legal expenses and settlements if your business is found liable for injuries, damages, or negligence.
Premises
The physical location where your business operates, which is often central to your coverage.
Errors & Omissions
Insurance that covers damages that come because of mistakes in your work, such as if you mishandle tax planning for a client or poorly design a product.
Umbrella Insurance
Provides additional liability protection above the limits of your existing policies.
Waiver of Subrogation
Prevents your insurer from pursuing reimbursement from a third party after paying your claim. Sometimes required in contracts.
Workers’ Compensation Insurance
Covers medical expenses and lost wages for employees injured on the job. Requirements vary by state, but in Virginia, most businesses with more than two employees must carry it.
Need Help Navigating Your Small Business Insurance?
At Goodrich & Watson Insurers, we specialize in helping Virginia businesses find the right coverage—from BOPs and liability protection to cyber and commercial auto policies. If you’re unsure what coverage you need—or what a term means—we’re here to explain it and make sure you’re protected.
Contact us today to schedule a review or get a personalized quote.
