Making sense of common insurance terms

07/09/2020, 12:59 PM by Installsure
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The Installsure team provides a handy glossary of terms that will help you navigate the waters when you’re looking at your insurance needs.

The insurance industry is awash with terminology that isn't much used in everyday life. As if that weren't bad enough, even some commonly understood terms can mean very different things in the context of insurance.

If you're new to running a business or haven't sourced an IBG or insurance cover before, it can be a bit confusing. At Installsure, we understand. Our mission is to make it easy for you to fast-forward your way to clear and easy to understand IBG and business insurance cover.

We are committed to supporting our clients and policyholders, whether that means offering support during the COVID-19 pandemic or simply equipping you with the knowledge you need to make an informed decision on insurance cover for your business.

So how about all that terminology? Here's a handy glossary that will help you navigate the waters when you’re looking at your insurance needs.


Bonds protect a person the company is working for whereas liability insurance protects the business against losses. You see more and more construction contracts these days requiring a performance bond as a pre-requisite of carrying out the work.


A company or individual who works as a middleman between insurers and customers. Their role can encompass a variety of functions, but typically they ensure the right cover is negotiated and offered and often receive a commission from the insurer as a result of sending business their way.


These are requirements specified in the terms of your policy that you must uphold in order for claims to be considered.


An annual payment made to the policy holder. Most typically you see it in life insurance policies. The policy holder receives a payment because they participate in the profits generated by the company.


Simply put, the excess is the amount your insurance company will ask you to contribute towards the settlement of any claim you make.


Similar to an excess, a franchise is a contribution made by the policyholder to a settlement award made as a result of a claim. In the case of a franchise, if the full franchise amount is exceeded, the full value of the claim is payable. An excess however is always applied.


Quite often an insurance policy will ‘lapse’ when the required renewal premium hasn’t been made. Make sure you know when your insurance is up for renewal, that way you can shop around to look for the best deal aligned to the most comprehensive coverage. It is worth noting that Guarantee Insurance policies (or IBGs) do not lapse and there is no need to renew these throughout their lifetime.

Liability Insurance

Provides the insured company with protection against claims resulting from injuries and damage to people or property. These policies cover both legal costs and any payouts from which the insured company would be responsible if found legally liable.


The contract which ratifies the legality of an insurance agreement.


The regular payment you make to the insurer to ensure the policy remains in place and valid. Please note that Guarantee Insurance policies (or IBGs) only require a one-off premium payment.


A refund of part or all of a premium payment.


A portion of the premium retained by insurers to pay future claims


The period of time for which the policy is in effect.


A person or company who are willing to take on the insurance risk and are often employed by the underlying insurers of an insurance policy. They examine the risk represented by the insured party to determine whether or not coverage should be provided and, if so, the rate and the terms according to which it will be offered.


In insurance, a warranty specifically refers to an agreement between the insured and the insurer that must be carried out by the insured to secure the validity of the contract of insurance. In the context of Guarantee Insurance policies (or IBGs), the term is more likely to occur in relation to warranties provided by home improvements contractors. In this case, a warranty means a written guarantee provided to the buyer by the manufacturer that should something go wrong with the product within a set period time that it will either be repaired or replaced.

Installsure will help you make sense of IBGs and business insurance

As a leading provider of Insurance Backed Guarantees (IBGs) and business insurance services to the double glazing, construction and home improvement industries, Installsure can help you fast-forward your way to clear, easy IBG and business insurance cover.

If you’d like to discuss your existing IBG or business insurance policies or are looking at taking out additional cover please don't hesitate to contact our team.