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Commercial Insurance Glossary

Insurance policies are written in a language most business owners were never taught — and the words that cost you money are the ones that sound harmless. This is a plain-English glossary of 139 commercial insurance and surety terms, defined by a Texas broker who spent his career reading these policies from the claims side.

Every entry gives you three things: what it is, why it matters at claim time, and what to look for on your own policy — with a citation to the ISO form, statute, or regulation behind it.

139
terms defined
4
coverage lines
31
authorities cited
3
answers per term
GL

General Liability

38 terms

Additional insured, the liability tower, Chapter 95, the eight-corners rule — and the ISO endorsement numbers your contracts actually name.

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GH

Group Health

35 terms

Level funding, stop-loss contract basis, ICHRA, QSEHRA, PBM audits, ALE status, and what “affordability” legally means.

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CY

Cyber Liability

35 terms

Funds transfer fraud, social engineering, the single-event rule, contingent business interruption, and why claim expenses erode your limit.

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SB

Surety Bonds

31 terms

Why a bond is not insurance, what you actually sign in the indemnity agreement, bonding capacity, and the Little Miller Act.

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Authorities cited

Every definition here traces back to a source. These are the forms, statutes, and regulations cited across the four glossaries.

  1. ISO Commercial General Liability Coverage Form CG 00 01. The base CGL policy form. Nearly every general liability policy sold in Texas is built on it.
  2. ISO CG 20 10 — Additional Insured, Owners / Lessees / Contractors. Grants additional insured status for ongoing operations.
  3. ISO CG 20 37 — Additional Insured, Completed Operations. Extends additional insured status past project completion. Its absence is the most common contract gap we find.
  4. ISO CG 20 01 — Primary and Noncontributory. Makes your policy pay first, without contribution from the upstream party’s policy.
  5. ISO CG 24 04 — Waiver of Transfer of Rights of Recovery. The waiver of subrogation endorsement your contracts keep demanding.
  6. Texas Insurance Code Ch. 151. Voids broad-form indemnification in construction contracts.
  7. Texas Insurance Code Ch. 542 — Prompt Payment of Claims Act. Statutory deadlines on carrier claim handling, with interest and attorney’s fees for violations.
  8. Texas Insurance Code Ch. 1811. Governs certificates of property and casualty insurance.
  9. Texas Civil Practice & Remedies Code Ch. 95. Property owner liability for injuries to independent contractors.
  10. The Texas eight-corners rule. Determines whether an insurer owes a duty to defend by comparing the four corners of the pleading to the four corners of the policy.
  11. ERISA — 29 U.S.C. §1001 et seq.. Governs employer-sponsored benefit plans, fiduciary duty, and preemption of state law.
  12. IRC §4980H — ACA Employer Shared Responsibility. The employer mandate, Applicable Large Employer status, and the affordability penalties.
  13. IRC §223 — Health Savings Accounts. HSA eligibility, contribution limits, and the HDHP requirements behind them.
  14. IRC §9831(d) — QSEHRA. The small-employer HRA available to employers under 50 that offer no group plan.
  15. 26 CFR §54.9802-4 — ICHRA. The individual coverage HRA rule, including class and affordability requirements.
  16. COBRA — 29 U.S.C. §1161 et seq.. Continuation coverage obligations after a qualifying event.
  17. 45 CFR Part 158 — Medical Loss Ratio. The MLR rebate rules that apply to fully insured plans.
  18. 29 CFR §2590.715-2715 — SBC. The Summary of Benefits and Coverage disclosure requirement.
  19. HIPAA Breach Notification Rule — 45 CFR Part 164, Subpart D. Notification duties following a breach of protected health information.
  20. Texas Business & Commerce Code §521.053. Texas data breach notification, including the 60-day clock.
  21. PCI DSS — Payment Card Industry Data Security Standard. The contractual standard behind PCI fines and assessments.
  22. Coalition Active Cyber Policy — Insuring Agreements A–T. A representative modern cyber form. The terminology in our cyber glossary tracks it.
  23. The Miller Act — 40 U.S.C. §§3131–3134. Federal performance and payment bond requirements on public projects.
  24. Texas Government Code Ch. 2253 — Little Miller Act. Bond requirements on Texas public works.
  25. Texas Government Code Ch. 2251. Prompt payment on Texas public projects.
  26. Texas Property Code Ch. 28. Prompt payment on Texas private construction projects.
  27. Texas Property Code Ch. 53. Texas mechanic’s and materialman’s liens, and their unforgiving deadlines.
  28. SBA Surety Bond Guarantee Program — 15 U.S.C. §694b. The federal guarantee that lets small and emerging contractors get bonded.
  29. AIA A312 — Performance Bond and Payment Bond. The most widely used bond forms, including the default, notice, and takeover mechanics.
  30. AIA G707 — Consent of Surety to Final Payment. Required by many owners before final payment or release of retainage.
  31. Texas Department of Insurance. Licensing, filings, and consumer guidance for insurance sold in Texas.

Master A–Z index

All 139 terms in alphabetical order. The badge tells you which glossary each one lives in.

ABCDEFGHILMNOPQRSTUVWX

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Education, not legal advice. These definitions describe how terms are generally used in commercial insurance and surety. Forms, endorsements, and statutes vary. Your policy or bond is the contract, and its wording controls. See our Legal & Licensing Disclosures.