You don't need to be an insurance professional to make a good decision – but there are fifteen terms worth recognising when you read a quote or a policy wording. Here they are, each in one plain sentence. For the complete A-to-Z collection, see the glossary.
- The bolded terms aren't decoration: each one stands behind an actual decision point.
- Five of the fifteen matter most: limit, deductible, exclusion, claims-made, retroactive date.
The parties involved
Policyholder: the one who takes out the policy and pays the premium – typically the business. Insured: the one whose liability the cover extends to – the business and typically its employees. Injured party: the one who suffered the loss; not a party to the contract, but the insurer settles their claim. Broker: an independent intermediary acting on the client's instructions – compares quotes from several insurers, with the decision always resting with the client.
The dimensions of cover
Limit of indemnity: the upper boundary of what the insurer will pay – per claim and per year. Sub-limit: a lower inner limit applying to specific types of loss, within the main limit. Deductible: the part of the claim that stays with you – a fixed sum, a percentage, or a combination of the two. Premium: the price of the insurance – it depends on your activity, revenue, limit and claims history.
Timing – the heart of the product
Claims-made: the logic under which cover is determined by when the claim is first asserted against the insured – not by when the damage was caused. Retroactive date: the day up to which cover extends back for claims arising from earlier work. Extended reporting period (run-off cover): a reporting window left open after the policy ends. Together, these three concepts decide what happens when you switch insurers or wind down an activity – for the details: claims-made article and run-off cover article.
The boundaries
Exclusion: what the cover doesn't reach – falling into categories such as insurable elsewhere, uninsurable, or business risk. Territorial scope: where the cover applies – Hungary, Europe, or a wider area. List of insured activities: the activities recorded in the contract – the real boundaries of the cover. Certificate of insurance: the insurer's confirmation that cover is in place – requested by clients and tenders (certificate article).
If you'd like to go through your own policy using these concepts, the policy-review checklist walks you through it point by point – or bring your policy to a free consultation, and let's talk it through.
How should you use this list?
These fifteen concepts aren't something to memorise – they're a tool. The most effective way to use them: open your own policy alongside this list, and find the actual value of each concept in your contract – limit: how much; deductible: how much and in what form; retroactive date: from when; exclusions: which ones apply to you. Where you can't find the answer in the policy, it's either in the terms (search the PDF) or it's a question worth clarifying – and those are exactly the questions that are most valuable at a consultation. Knowing the concepts isn't the goal, it's the tool: it exists so that quotes and policy terms speak your language, not the other way round.
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