Insurance 101

  • Why do I need to sign more forms after I filled out the app and already paid for my policy?

    When you complete the forms on, you give us the info we need to do the leg work and fill in the carriers’ applications. That means that one key piece is still missing from the application process: your signature affirming that all of the information is accurate.

    For this reason, after you approve your proposal and pay, you’ll receive a copy of the application we filled in for you. All you need to do is review it for accuracy and provide your e-signature. Then we’ll have what we need to start the binding process with the carrier.

    Sometimes the application is accompanied by other forms. This usually happens when you bind a policy with a non-admitted carrier. These forms vary state-by-state but generally their purpose is transparency: the state wants to make sure you (the insured) knows what costs were associated with the non-admitted policy and that we (the broker) used diligent effort to place your policy with an admitted carrier before going to the non-admitted (aka “excess” or “surplus lines”) carriers.

  • What’s the difference between admitted and non-admitted insurance carriers?

    In any given state in the US, a carrier can be “admitted” or “non-admitted.”

    Admitted carriers

    These carriers file their policy forms and rates with the state and pay a portion of the premiums they earn into a state guarantee fund. This means that in the unlikely event the carrier becomes insolvent, a state fund will step in to pay the company’s obligations to its policyholders.

    Non-admitted carriers

    (aka “excess” or “surplus lines”) These carriers are also regulated by the states, but to less of a degree than admitted carriers. They don’t need to get state approval for their forms and, for this reason, are able to offer coverage that admitted carriers can’t. Businesses that are young, non-traditional, disruptive or high-risk often go to non-admitted carriers for their policies. These policies are taxed by the state and do not benefit from the backing of a guarantee fund In the unlikely event that the carrier becomes insolvent.

    Bottom line:

    While your ultimate choice of an insurance company may be restricted based on the type of insurance you need, the priority should always be to seek a high-quality provider, regardless of whether the company is admitted or non-admitted.

    (from Insurance Thought Leadership)

  • What do I do in the event of a claim?

    Claims happen. And when they do, we’re here to help.

    The first thing you should do is get yourself squared away. If there’s a fire, get to safety. If a theft occurred, call the police. You get the idea.

    After that, it’s time to get in touch with us. Head over to and fill out an incident report form. That will get the ball rolling on our end.

    One of our claims specialists will reach out to you if there are any details to confirm. There may even be some cases where making a claim isn’t in your best interests, such as when your loss is lower than your policy’s deductible.

    We’ll help you get a better feel for where you stand and then connect you with the claims manager (or managers, if more than one policy is impacted). The claims process is something that happens between you and your carrier, but we’re here to help along the way.

    Some important things to remember:

    • take action as soon as possible. Carriers can deny claims on the basis that it took you too long to report them. A few days is OK. A few months probably isn’t.
    • keep detailed records of everything that occurred.
    • many policies state that they won’t pay for any expenses you incur without the carrier’s consent. Make sure you know how your policy works (we’re here to help you with that).
  • What’s an Additional Insured?

    An endorsement identifying a person or entity which the policy will also defend as long as they are named alongside the policyholder and the claim arises out of the policyholder’s wrongdoing.

    When you’ll see it:

    • New office location
    • New landlord
    • New client contract
    • New vendor contract
    • COI requests generally

    Why it’s needed

    Allows the new landlord/client/vendor or other party with which our client works, to recover under our client’s policy before their own policy when a claim comes in that is due to our client’s alleged negligence

    Typical underwriting info needed:

    • The relationship between the insured and the requesting party so that they know the insurable interest between the two
    • Address of the requesting party
    • Legal name of the requesting party
    • Required language or endorsement form number to ensure we aren’t missing anything that needs to be added
    • Copy of contract requiring AI status. This proves that the status (and thus the extra exposure) is actually required
  • What’s the difference between a Deductible and a Retention?

    Both terms refer to the amount of money the insured has to pay before the carrier will begin paying.


    • are usually found on Occurrence policies
    • are funded by the carrier and collected later from the insured
    • reduce (or erode) the limit available to pay claims


    • Also known as SIR or “Self-insured Retention”
    • are usually found on Claims Made policies
    • are paid directly by the insured
    • do not reduce the available limit
  • What’s an Endorsement?

    A document that attaches to, and becomes part of, your insurance policy, changing the way the policy works. Any change that is made to the boilerplate policy the carrier files with the state regulators is made via endorsements: changing the business address, adding a new line of coverage, excluding coverage for a specific exposure…all of these are done via endorsements.

    These are also known as “riders” when referring to other types of contracts.

  • What’s a BOR (Broker of Record letter)?

    A Broker of Record letter (BOR) is a document signed and dated by the insured which grants a specific broker the sole right of representing the insured to insurance companies for the purpose of placing coverage.

    Two different brokers can’t work with an underwriter on the same account at the same time. There can only be one highla..Broker of Record.

    It’s important to note that BOR’s are specific to coverages so you can have one broker work on D&O and another work on E&O (though this is highly discouraged for many reasons) and that the BOR can be rescinded by the insured at any time. It isn’t a binding agreement.

    Most carriers, upon receiving a new BOR letter, will give the current broker a window of 5-10 days during which they will not work with the new broker, giving the old one an opportunity to win the business back. This window can, and should, be waived by the old broker if the insured requests it.

  • What’s the difference between Aggregate Limit, Occurrence Limit and Per Claim Limit?

    Occurrence limit: the most the policy will pay for any one occurrence, even if multiple claims arise from the same occurrence. These policies are often called “Occurrence” policies since that is the claim trigger.

    Per Claim limit: the most the policy will pay for any one claim. Usually any “interrelated wrongful acts” will be counted as one single claim, even if there are multiple claimants. These policies are often called “Occurrence” policies since that is the claim trigger.

    Aggregate limit: or policy limit, is the most the policy will pay for all claims and all coverage sections for the duration of the policy period. In most cases, claim payments made from the Occurrence Limit or the Per Claim limit will reduce the available Aggregate limit.

  • What’s a Notice of Cancellation?

    A letter from the carrier stating the policy will be canceled, when it will be canceled, the reason for cancellation, and any recourse the insured can take to get the Notice rescinded.

    When you’ll see it:
    • in contracts with landlords, vendors, and clients
    • when your policy is being canceled
    Why it’s important
    • contracts will often stipulate that your counterparty is added by endorsement to your policy (usually in tandem with an Additional Insured and Waiver of Subrogation request) and that such endorsement gives the counterparty 30 days’ notice before your policy is canceled. The counterparty is making sure that you are staying covered at all times.
    • if you’re receiving a notice of cancellation it means you need to take immediate action to prevent your policy from being canceled.
    Is it the same thing as a Conditional Non-renewal Notice?


  • What’s the difference between Employer’s Liability and Employment Practices Liability?

    Employer’s Liability: connected to Workers Compensation policies. Provides the company with legal defense protection if it is held liable for a employee’s illness or injury.

    Employment Practices Liability: a type of management liability coverage, often packaged with Directors & Officers insurance. Provides the company and management with legal defense protection if it is held liable for a workplace tort such as harassment, discrimination, wrongful termination, and others.

  • What’s a Retroactive Date vs Prior Acts Date vs Continuity Date vs Pending & Prior Date?

    All four terms refer to a specific date before which the carrier won’t cover claims, but they work in different ways:

    Retroactive Date, Prior Acts Date and Continuity Date all essentially refer to the same thing. Any act that occurs before this date will not be covered. Even if the claim isn’t actually made until halfway through the policy period, the carrier would deny the claim if the act that generated the claim preceded the specified date.

    Pending & Prior Date refers to pending or prior litigation. The focus here is on when the claim is made, not when the act occurred. As long as the insured first receives the claim and makes it to the carrier during the policy period, it doesn’t matter when the act that generated the claim occurred.

    Important note: the meaning of these terms can vary between carriers. Make sure to double-check the policy language.

  • What’s a Binder?

    A placeholder agreement between the insured and the carrier that dictates coverage until the policy is issued. After receiving an order from an insurance broker bind a quote, the carrier will send back a binder so the insured has documentation of the basic terms of the coverage that has been bound.

  • What’s a Conditional Non-renewal Notice?

    A letter that carriers are required by law to send to every policyholder and their broker. It arrives 45-90 days before the expiration date of the policy, states that renewal terms have not yet been offered, and advises what next steps would be required to obtain a quote.

    Is it the same thing as a Non-renewal Notice?

    No. A Non-renewal Notice (without the “Conditional” piece) is a letter advising that the carrier is refusing to renew coverage upon expiration. This can happen if there has been claim activity, if the underwriter feels the true exposure wasn’t accurately represented to them or if they simply have a change in their corporate underwriting appetite.

    Is it the same thing as a Cancellation Notice?


  • What’s considered payroll?

    It depends on the state! Here are New York’s rules according to the “Workers Compensation and Employers Liability Manual”:


    1. Wages or salaries including retroactive wages or salaries;
    2. Total cash received by employees for commissions and draws against commissions;
    3. Bonuses including stock bonus plans:
    4. Extra pay for overtime work except as provided in Rule V.E.;
    5. Pay for holidays, vacations or periods of sickness. Refer to Rule IV.E.2. for allocation of payroll for employees subject to more than one classification code;
    6. Payment by an employer of amounts otherwise required by law to be paid by employees to statutory insurance or pension plans, such as the Federal Social Security Act;
    7. Payment to employees on any basis other than time worked, such as piecework, profit sharing or incentive plans;
    8. Payment or allowance for hand tools or power tools used by hand provided by employees either directly or through a third party and used in their work or operations for the insured;
    9. The rental value of an apartment or a house provided for an employee based on comparable accommodations;
    10. The value of lodging, other than an apartment or house, received by employees as part of their pay, to the extent shown in the insured’s records;
    11. The value of meals received by employees as part of their pay to the extent shown in the insured’s records;
    12. The value of store certificates, merchandise, credits or any other substitute for money received by employees as part of their pay. Refer to Exclusions below for certain fringe benefits [substitutes for money7 not considered to be remuneration;
    13. Payments for salary reduction, employee savings plans, retirement or cafeteria plans (IRC 125) which are made through employee authorized salary deductions from the employee’s gross pay;
    14. Wages paid to employees as salary in conjunction with the Davis-Bacon Act or other prevailing wage laws;
    15. Annuity plans;
    16. Expense reimbursements to employees to the extent that an employer’s records do not substantiate that the expense was incurred as a valid business expense;
      • Note: When it can be verified that the employee was away from home on the business of the employer, but the employer did not maintain verifiable receipts for incurred expenses, a reasonable expense allowance, limited to a maximum of $30 for each such day, will be permitted.
    17. Payment for filming of commercials excluding subsequent residuals which are earned by the commercial’s participant(s) each time the commercial appears in print or is broadcast.



    1. Tips and other gratuities received by employees;
    2. Payments by an employer to group insurance or group pension plans for employees, other than payments covered by Rule V.B.2.f. and Rule V.B.2.m.;
    3. The value of special rewards for individual invention or discovery;
    4. Dismissal or severance payments except for time worked or accrued vacation;
    5. Reimbursed expenses and allowances paid to employees shall be excluded, provided all three of the following conditions are met:
    6. The expenses or allowances were incurred in the course of the employer’s business;
    7. The amounts are shown separately for each employee in the employer’s records;
    8. The amount of each expense reimbursement or allowance payment approximates the actual expenses incurred;
    9. Payments for active military duty;
    10. Employee discounts on goods purchased from the employee’s employer;
    11. Supper money for late work;
    12. Work uniform allowances;
    13. Sick pay paid to an employee by a third party such as an insured’s group insurance carrier which is paying disability income benefits to a disabled employee;
    14. Employer provided perquisites (“perks”) such as:
      • An automobile;
      • An airplane flight;
      • An incentive vacation (e.g., contest winner);
      • A discount on property or services;
      • Club memberships;
      • Tickets to entertainment events.
    15. Employer contributions to salary reduction, employee savings plans, retirement, or cafeteria plans (IRC 125)–Contributions made by the employer, at the employer’s expense, that are determined by the amount contributed by the employee.

Coverage FAQ: D&O insurance

  • What’s a Major Shareholder Exclusion?

    An endorsement that is attached to a Directors & Officers policy that limits coverage by stating that claims made by (or on behalf of) certain shareholders will not be covered.

    When you’ll see it:

    When the insured has shareholders with large ownership percentages (5-15% or more) who do not have representation on the board of directors.

    Why it’s needed:

    It protects the carrier. The size of the stakes increases the potential claim payout. The ownership percentage implies certain influence over the operations of the company. Insurance fraud could occur in the form of collusive claims.

    Typical underwriting info needed:

    Capitalization table and list of directors

  • What’s Side A, Side B and Side C

    These are the three basic insuring agreements in a D&O policy. Although they cover different risks, they’re usually subject to the same aggregate limit of liability.

    Side A: when a person is named in a claim but the company can’t indemnify them, either because of insolvency or because it’s forbidden in the bylaws. In cases of insolvency, there is usually no retention. If the company is not insolvent, the carrier will usually ask the company to pay the Side B retention.

    Side B: when a person is named in a claim and the company does indemnify them. Here the carrier would be reimbursing the company for its defense of the person. A retention applies to these claims

    Side C: when the company itself is named in a claim. This is often the case with lawsuits from shareholders. The company would be reimbursed by the carrier and a retention would apply here as well.

  • Why do I need to send my financials and cap table?

    The most common source of D&O claims is investor lawsuits and investors are most likely to sue when the company is in financial trouble. Underwriters want to know the size of a company’s balance sheet, its profitability and upcoming debt obligations, and they need to have an idea of who the big stakeholders (i.e. potential claimants) are.

Coverage FAQ: Cyber insurance

  • What are Notification Costs?

    If the privacy of 3rd party personally identifiable information (PII) that you are responsible has been compromised — or even if there is the possibility that it’s been compromised — you as a business are required by law to take certain steps. One such step is notifying each affected user of the potential theft/loss of their PII and providing next steps for remedying the problem.

    The cost of notification alone (not including other legally required remedies e.g. credit monitoring and call centers) is about $0.59 per record. That could me a monumental cost for tech companies that are often exposed to a large volume of PII.

  • What’s a Waiting Period vs Period of Restoration

    Waiting Period: the amount of time after a cyber business interruption before business interruption coverage will begin.

    Period of Restoration: the amount of time after the Waiting Period is over that business interruption coverage will be provided.

Coverage FAQ: General Liability and Property Insurance

  • What’s a Lenders Loss Payable / Mortgagee Loss Payable?

    Similar to a Loss Payee, this is an endorsement identifying a person or entity which a property policy will pay in the event of a loss. The difference here is that the payee is a bank, mortgage company or other lenders.

    When you’ll see it:

    When a Certificate of Insurance needed by the bank before the insured can get a new loan.

    Why it’s needed:

    Lenders loss payee is basically “Additional Insured,” but for Property: it makes your policy pay out for a loss of property but, unlike a normal Loss Payee, the property is usually unspecified as the additional coverage is related broadly to the insurable risk the bank takes on by agreeing to provide the insured with a loan.

    Typical underwriting info needed:

    • Relationship between the two parties
    • Which location this is attached to?
    • The amount being covered
    • Copy of contract
  • What’s a Loss Payee?

    A person or entity which a property policy will pay in the event of a loss. Often this person or entity is identified in an endorsement attached to the policy.

    When you’ll see it:

    Usually when a Certificate of Insurance is needed for equipment rentals or because the insured is holding property belonging to a 3rd party “certificate holder.”

    Why it’s needed:

    Loss payee is basically “Additional Insured,” but for Property: it makes your policy pay out for a loss of property (i.e. damage to the rented equipment) before the 3rd party’s insurance pays out

    Typical underwriting info needed:

      • The relationship between the two parties
      • Which location is this attached to?
      • The amount being covered
      • Copy of contract
  • What does Primary and Noncontributory mean?

    The policy that is “primary and non-contributory” must:

    • pay before other applicable policies (primary); and
    • without seeking contribution from other policies that also claim to be primary (noncontributory).

    Landlords, vendors, customers and other contract counterparties will ask you to endorse your General Liability policy as such so they can rest assured that their policy limits aren’t at risk if there’s a claim against both of you.

  • What’s a Waiver of Subrogation?

    An endorsement identifying the person or entity against whom the carrier is agreeing not to subrogate. That is to say the carrier won’t go after these persons or entities to recover losses that the carrier has paid out.

    When you’ll see it:

    • New office location
    • New landlord
    • New client contract
    • New vendor contract

    Why it’s needed:

    Prevents our client’s insurance company from being able to turn around and recover from the landlord/client/vendor’s insurance company after the loss has been paid

    Typical underwriting info needed:

    • The relationship between the insured and the party requesting a waiver of subrogation so that they know the insurable interest between the two
    • Address of the requesting party
    • Legal name of the requesting party
    • Required language or endorsement form number to ensure we aren’t missing anything that needs to be added
    • Copy of contract requiring WOS status. This proves that the status (and thus the extra exposure) is actually required