business insurance acronyms alphabet soup illustration
Every industry has its share of jargon and acronyms and business insurance is no stranger to the alphabet soup - just ask a member of our CST about your BOP COI. To help make it easier to navigate the business insurance acronym jungle, we’ve provided a handful of the more common acronyms you’re likely to encounter.

1. BOP – Business Owner’s Policy

A business owner’s policy is a combination of both commercial property and general liability insurance. This bundle covers lawsuits and damages and is typically less expensive to buy than separate Liability and Property policies.

Another plus – a BOP provides you with confidence when handling property managers and major customers. It serves as a reassurance that you will not be put out of business because of a lawsuit - in fact, in many cases, they require a BOP to provide them with the assurance of your stability.

2. BII – Business Interruption Insurance

Business interruption insurance, sometimes called business income coverage, is a policy that helps you in the unfortunate time you’re forced to temporarily close your business due to a disaster.

It differs from property insurance which provides coverage for the physical damage, by providing coverage for loss of revenue, including:
  • Lost revenue
  • Rental or lease payments
  • Relocation expenses
  • Employee wages
  • Taxes
  • Loan payments

3. COI – Certificate of Insurance

A certificate of insurance, or what those of us in the biz call a “cert,” is just a certificate that verifies the insurance coverage you have for your business. The cert typically has the following information:
  • Types and limits of coverage
  • Insurance carrier
  • Policy number
  • Effective dates
  • Policyholder’s name
Your COI shouldn’t replace your insurance policy, but it’s typically requested during third party transactions (contracts and agreements) so they can feel confident in the stability of your company and doing business with you.

4. EIN – Employer Identification Number

Your EIN (also referred to as your FEIN- Federal Employer Identification Number) is a 9-digit identification code assigned to your business by the IRS. It’s required from all carriers in order to provide a quote. It’s a way for each carrier to identify you - it’s the most unique piece of data that exists for your business, so it’s really one of the most necessary pieces of information.

Don’t know what your EIN is or where to find it? It should be on the documentation you received when you applied to register your business - it’s structured like this: XX-XXXXXXX. Your bank may also have your EIN on file (if you created a business bank account). Otherwise, you can call the IRS (800-829-4933). Don’t feel like calling the IRS? We don’t blame you. You can also find your EIN on one of your W-2 Tax forms, or likely on your previous insurance policy.

If you’re a sole proprietor and you haven’t filed for an EIN, you may be using your social security number in its place.

5. EPLI – Employment Practices Liability Insurance

Employment practices liability insurance covers your legal expenses such as settlement costs, court costs, attorney fees and more, if you are sued by an employee.

Like most small businesses, you hire, manage and potentially have to terminate employees. No business is immune to an employment practice lawsuit, and defending them can become very expensive. An employee may file a lawsuit based on claims of discrimination, wrongful termination, negligent supervision, or harassment. An EPLI protects your business from the costs associated with the legal process.

6. NAICS Code - North American Industry Classification System Code

NAICS (pronounced “nakes”) is a classification that is used to identify the industry and line of business you are in. Having a common set of codes allows agencies, carriers, businesses, and statistical agencies to use a common language and provide the best data. You are not assigned a code by anybody - typically you’ll self identify the code that best describes your business. Need help figuring out what your NAICS code is? You can search on the NAICS website, or simply contact/chat with us and we’ll help you figure it out.

7. HHA – Hold Harmless Agreement

Some risk is unavoidable. A hold harmless agreement reduces the risk of being part of litigation between the parties involved. Basically, it protects your business against lawsuits by requiring those who you are doing business with, to refrain from suing you.

For example, a commercial contractor may want to have an HHA which states they are not liable if their clients hurt themselves on the worksite while the project is underway. Likewise, the client might want to have an HHA to protect themselves in case the contractor injures themselves while on the property.

Note: An HHA can also be called a Hold Harmless, Hold Harmless Letter, Hold Harmless Release, Waiver of Liability, Release of Liability or Hold Harmless Clause.

8. E&O – Errors and Omissions Insurance

E&O insurance (also known as Professional Liability Insurance) protects your business and its people from the cost of defending claims of inadequate or negligent work. Does your business need E&O insurance? It depends on the services your business provides. Typically this type of insurance is useful for any type of industry that provides professional advice or services. This may include attorneys, consultants, marketing and communications agencies, lawyers, accountants, and even insurance agents themselves!

9. ACV – Actual Cash Value

In property/physical damage, an insurance provider needs a method of determining the value of the insured property so it’s clear what will be paid out in the event of a loss. ACV is typically calculated in one of these ways: a) the cost of repairing or replacing the damaged property (depreciation impacts the value). b) the “fair market value” of the damaged property c) the "broad evidence rule," which most states follow, could include a wide array of strategies for determining the value of the items being replaced (original cost, market value, obsolescence, etc).

Let’s say you own expensive machinery which is critical to your business. One fateful and stormy night it is damaged beyond repair by the severe weather. If you’ve invested in a replacement value policy not an actual cash value policy, your machinery can be replaced with something at the current market price without a deduction for depreciation.