Written by William Paull
Co-Founder & Account Director
Reviewed by Jeff Forbes
Co-Founder & Account Director
Intro
This page gives you the short answer first. Where a term has its own full guide, we link to it.
Start here
- Insurer
- Insured / Policyholder
- Policy
- Premium
- Claim
- Excess
- Sum insured
What is accidental damage cover?
Accidental damage cover pays for loss or damage from a sudden, unintended event, such as a forklift backing into a wall. It is not limited to the perils a policy names, which makes it the opposite of a defined events or listed events policy.
What does "aggregate limit" mean on a policy?
An aggregate limit is the total your insurer will pay across all claims in one policy period, not per claim. Once your claims reach that figure, nothing is left for the rest of the year.
What is "agreed value" cover, and how does it differ from market value?
Agreed value cover fixes your payout for a total loss at a figure you and your insurer agree before anything happens, not one worked out after the event. It matters most on motor fleet policies, where it stops an argument over what a written-off vehicle was worth on the day of the loss.
What is "average relief" (a co-insurance waiver)?
Average relief means your insurer agrees not to apply the co-insurance clause at all. It applies when your claim falls under the wording's small-claim threshold. On several business-pack wordings brokers place, it also applies when the property was insured to full value on a professional valuation updated within roughly the last year.
Full mechanics: when the co-insurance clause does not apply.
What is a "benefit" under a policy?
A benefit is what your policy pays or provides once a claim is accepted: cash, a repair, a replacement, or an extra such as temporary accommodation or emergency repairs. Some benefits are automatic. Others are optional extensions you pay extra for.
What does "betterment" mean in an insurance claim?
Betterment is the value added when a repair leaves something newer, stronger or more compliant than it was before the damage. A full roof replacement when only half was damaged is one example. Your insurer can deduct it from the payout, or ask you to contribute towards the improved standard.
What is the difference between an insurance broker and an agent?
A broker acts for you, searching the market and advising on what fits your risk. An agent acts for one insurer, selling only that insurer's products. The difference shows up at claim time: your broker is accountable to you for the advice given.
Full comparison: Direct Insurer vs Insurance Broker: What's the Difference?
What is business interruption insurance?
Business interruption insurance replaces the profit your business loses when it can't trade after an insured event such as fire, storm or flood. It also covers fixed costs like rent, wages and loan repayments while your business can't trade. It runs for an indemnity period you choose, and it belongs to the business trading from the premises, not the building's owner.
Full product detail: Business interruption insurance.
What is a certificate of currency?
A certificate of currency is a one-page document from your insurer or broker confirming a policy is in force. It shows the policy number, the insurer, the period of cover and what's insured. Lenders, landlords and head contractors ask for it as proof of cover before settlement, before a lease starts or before a contract begins. The market uses "certificate of currency" and "certificate of insurance" as though they meant the same thing. We will not issue a certificate of currency until the policy is paid and the cover is confirmed in force, because an unpaid policy is one that can be cancelled out from under whoever is relying on it.
What a certificate proves, how we set ours and why a funded premium counts as paid: certificates under a commercial lease. Related: premium funding.
What is an insurance claim?
A claim is your formal request to your insurer to pay for a covered loss, such as a fire or a storm. Your insurer checks it against the wording and your sum insured. It then pays in full, in part, or not at all if the loss sits outside what you bought.
What does "claims-made" mean?
On a claims-made policy, the policy that responds is the one in force when a claim is made or notified, not the one running when the work was done or the conduct happened. Professional indemnity and management liability insurance are written this way. That is why the retroactive date and unbroken cover matter as much as the premium.
See professional indemnity insurance and management liability insurance. Compare with occurrence-based cover, below.
What is a co-insurance clause (average clause)?
A co-insurance clause, also called an average clause, lets your insurer scale down the payout on a partial claim if your sum insured sits below a set percentage of the true rebuild cost, typically at least 80%. On a total loss the clause does not apply at all. You receive the full sum insured, and any gap to the real rebuild cost is yours.
Worked examples: The Co-Insurance Clause: What Every Building Owner Must Know.
What does "consequential loss" mean in an older policy?
In an older wording, "consequential loss" generally means indirect financial loss that follows physical damage, such as lost profit or extra costs, rather than the cost of the damage itself. Modern Australian commercial policies mostly do this job through business interruption insurance, in clearer language.
What is cyber insurance?
Cyber insurance covers two things after a cyber incident. The first is what happens to your own business, such as money stolen through a scam, getting your systems running again and the income you lose while offline. The second is what you owe others, such as a claim from a customer whose details were exposed. Cyber liability insurance is the name for the second half, and most policies include both.
Full product detail: cyber insurance.
What is the cyclone pool (ARPC)?
The cyclone pool is a government reinsurance scheme run by the Australian Reinsurance Pool Corporation (ARPC). It takes on the cyclone and related flood risk behind eligible small business and strata property policies with a total sum insured of $5 million or less across all locations on the policy. It exists to widen the market and ease premiums in cyclone-exposed northern Australia, including North Queensland.
What is D&O insurance?
D&O is short for directors and officers insurance. It is designed to protect you as an individual when a claim names you as a director or officer, rather than protecting the company. For small and mid-sized businesses it generally sits inside a management liability policy, alongside the sections that protect the business itself.
Full product detail: directors and officers insurance.
What are "defined events" or "listed events" on a policy?
A defined events, or listed events, policy only pays when the cause of loss is one of the perils named in the wording, such as fire, storm, impact or theft, not any sudden accidental cause. If what happened is not on that list, the policy does not respond, however genuine the loss.
What is the "duty of disclosure"?
The duty of disclosure requires you to tell your insurer, before a contract starts, everything you know that a reasonable person in your position would know is relevant to the insurer's decision to offer cover and on what terms. It applies to business and commercial insurance contracts. Getting it wrong, even innocently, can let an insurer later reduce or refuse a claim.
What is the "duty to take reasonable care not to make a misrepresentation"?
Since October 2021, individuals buying insurance wholly or mainly for personal, domestic or household purposes, a "consumer insurance contract", have a lighter duty: answer the insurer's questions honestly and carefully. Most commercial and business clients remain under the duty of disclosure above.
What is an endorsement?
An endorsement is a written change to your policy after it starts. It adds, removes or varies cover, such as noting a new vehicle on a fleet policy. Endorsements are legally part of your policy.
What is EPS / sandwich panel, and why does it affect my insurance?
EPS, expanded polystyrene, is the foam core inside sandwich panel, a lightweight insulated wall and roof panel common in sheds, cool rooms and factories. EPS burns fast and fuels a fire once alight. Once it makes up around 20% or more of a building's floor area, most mainstream commercial insurers decline or heavily restrict cover. That pushes the risk to specialist insurers.
Relevant on warehouse insurance and industrial building insurance.
What is errors and omissions (E&O) insurance?
Errors and omissions (E&O) insurance is the American name for professional indemnity insurance. When a contract asks you for E&O cover, a professional indemnity policy answers it, as long as its limit and territory meet the contract's terms.
See errors and omissions insurance. Compare with professional indemnity insurance, below.
What is an excess?
The excess is the amount you agree to pay towards a claim before your insurer pays the rest. A higher excess usually lowers your premium, because you carry more of the small, common losses yourself.
The trade-off, with a real client example: Why We Sometimes Recommend a Higher Excess.
What is an exclusion?
An exclusion is something your policy specifically does not cover. Common commercial exclusions include gradual deterioration and wear and tear, tenant rent default, and uninsured perils like flood unless you add them.
The gradual-deterioration exclusion in depth: How Your Roof Condition Affects Insurance Claims.
What is the difference between general advice and personal advice?
General advice is product information given without considering your situation. It is what most direct insurer call centres and comparison sites are legally set up to give. Personal advice takes your circumstances into account and recommends what suits you. That is what you engage a licensed broker to provide.
What does "gross profit" mean in a business interruption policy?
Business interruption gross profit isn't the figure on your tax return. It's built from your turnover, adjusted for stock movements, minus the costs that stop automatically when you stop trading.
Full explanation: Business Interruption Insurance Explained.
What is an indemnity clause in a commercial lease?
An indemnity clause in a commercial lease is a tenant's agreement to cover the landlord's losses from the tenant's use of the premises. It sits alongside the landlord's own property owners liability policy and does not replace it, because a lease promise is only as good as the tenant's ability to pay.
What is an indemnity period?
The indemnity period is how long your business interruption or loss of rent cover keeps paying after an insured event, not how long the physical rebuild takes. Consolidated Insurance Brokers strongly recommends 24 or 36 months, depending on the client. The minimum is 18 months, and a longer period puts you in a better position at claim time.
How the period is chosen: business interruption explained.
What is indemnity value?
Indemnity value is what your building or contents are worth today, allowing for age, wear and depreciation. It is closer to a second-hand price than the cost of a brand-new equivalent. Most commercial property policies insure on a replacement value basis instead.
See "replacement value" and "market value", below, and Underinsurance: The Biggest Risk to Commercial Building Owners.
Who is "the insured" (also called the policyholder)?
The insured is the person, trust or business a policy is written to protect, and the party who can make a claim. On a commercial building policy, that is usually the entity that owns the building. One schedule can name more than one party with an insurable interest, such as an owner and a mortgagee.
What is an insurer?
The insurer is the company that carries the risk and pays a valid claim. It is the underwriting party named on your policy schedule. Consolidated Insurance Brokers deals across a panel of insurers and is not one itself. Whether a claim is paid or declined is the insurer's decision, not ours.
What does "ISR" mean if I see it in my policy?
ISR, Industrial Special Risks, is an older name for a broad commercial property wording that bundles building, contents and business interruption cover into one policy. It is common on larger or higher-value commercial and industrial risks. On your schedule it describes this package, not a separate product to buy on top.
What is IT liability insurance?
IT liability insurance is one policy for IT contractors, sole traders and small consultancies. It combines professional indemnity for your advice, code and work with public and products liability for injury or property damage. ICT liability insurance is the same product under an older name. Cyber is a separate question.
Full product detail: IT liability insurance.
What is loss of rent cover?
Loss of rent cover replaces a landlord's rental income when an insured event, such as fire or storm damage, makes a property untenantable. It runs for the chosen indemnity period and does not cover a tenant who simply stops paying rent. That is rent default, a separate cover with different rules by property type: worth having on a residential landlord policy, rarely worth paying for on a commercial one.
See how loss of rent cover is set on commercial property insurance and commercial landlord insurance.
What is market value, and why isn't it my building's sum insured?
Market value is what a buyer would pay for your property, including the land it sits on. It's the wrong number for a building sum insured, because land doesn't burn down. A rising property market can put it well above the cost of rebuilding the structure, and a struggling one well below it.
What does "material damage" mean in a policy document?
"Material damage" is the traditional insurance-industry term for physical loss or damage to buildings, contents or stock, as opposed to the financial loss that follows it (see business interruption insurance). When a wording uses it as a section heading, it names the section that covers that physical loss or damage.
What is media liability insurance?
Media liability insurance is a packaged policy for businesses that create and publish content, such as production companies, agencies, publishers and event producers. It covers claims about what you publish, including defamation, intellectual property and privacy. It also brings professional indemnity, public liability and cyber into the same policy. Your schedule decides which of those sections you hold.
Full product detail: media liability insurance.
Why does it matter whose name is on the policy (the "named insured")?
The named insured is the exact legal person or entity written on the policy schedule. It's the only party the insurer pays or defends. If a trust or company owns the building but the policy is taken out in a director's personal name, it won't respond correctly for the true owner, whoever paid the premium.
Full explanation: commercial building insurance.
What is occurrence-based cover?
On an occurrence-based policy, the policy that responds is the one in force when the incident happened, even if the claim comes years later. Public liability insurance is typically written this way. That is why, unlike claims-made cover, it generally needs no run-off cover when a business closes.
What does "padlock" mean when a broker mentions a padlock quote?
"Padlock" is industry shorthand for a simplified, standardised small business property wording, named after CGU's Padlock Insurance product. It is built for simple, lower-risk premises rather than complex or higher-value ones.
What is a PDS (Product Disclosure Statement)?
A PDS is the legally required document that sets out what a policy covers, excludes and costs, so you can decide before you buy. It's longer and more detailed than the policy schedule. It is also the document that governs a claim.
What is an insurance policy?
A policy is the legal contract between you and your insurer. It sets out what is covered, what is excluded, the sum insured, the excess, and the conditions both sides agree to. It has two parts, read together: the schedule, with the details specific to you, and the wording, with the standard terms for everyone who buys that product. Each year your policy renews into a new contract period.
What is a premium?
A premium is what you pay your insurer for a period of cover. It is calculated from your risk: the building or activity insured, its location, your claims history, your sum insured, and the cover options you choose. Premium funding, below, lets you spread this cost over the year.
What is premium funding?
Premium funding is a separate loan that pays your full annual premium to the insurer upfront. You repay the finance company in instalments, usually monthly, with interest. The insurance stays a normal twelve-month policy. If your instalments stop, the funder can cancel the policy to recover its money.
What it costs and the one risk to understand: insurance premium funding, explained.
What is professional indemnity insurance?
Professional indemnity insurance covers the financial loss a client suffers because of your advice, design, report or professional service, when the loss comes from an error, omission or negligence rather than a physical accident. It's written on a claims-made basis.
Full product detail: professional indemnity insurance.
What is property owners liability insurance?
Property owners liability insurance covers your own legal liability as a landlord when someone is injured, or their property is damaged, in connection with a building you own. It is separate from your tenant's business liability policy or a strata scheme's insurance.
Full product detail: property owners liability insurance.
What is public liability insurance?
Public liability insurance covers your legal liability for injury to another person or damage to their property caused by your business. It pays your defence costs as well as any damages awarded. It's written on an occurrence basis.
Full product detail: public liability insurance.
What is replacement value (rebuild cost)?
Replacement value, also called rebuild cost, is what it would cost today to demolish, redesign, get approvals for and reconstruct your building from scratch, including professional fees and debris removal. It's the number your commercial building sum insured should match.
See our underinsurance guide and desktop building replacement estimate.
What is a retroactive date?
The retroactive date is the earliest point your current claims-made policy, such as professional indemnity or management liability, will respond to a claim about. Work or conduct from before that date has no cover under the current policy, even though the claim is made now. That is why switching insurers without checking this date can quietly reopen years of past exposure.
See professional indemnity insurance, management liability insurance and our guide to switching professional indemnity insurers.
What is run-off cover?
Run-off cover extends a claims-made policy for a defined period after you stop practising, sell the business, or wind up a company. Cancelling the policy on your last working day doesn't end your exposure to a claim about past work.
See professional indemnity insurance, and what to check when you retire, sell or switch insurers.
What is salvage in an insurance claim?
Salvage is what remains of damaged property after a claim, such as a written-off vehicle or fire-damaged stock. The insurer usually owns it once it has paid the claim in full. If you want to keep the damaged item, tell your insurer before settlement, because its value is often deducted from your payout either way.
What is stamp duty on an insurance premium?
Stamp duty is a state and territory government tax added to most Australian insurance premiums, on top of the base premium and GST. The rate is set by where the insured property or risk is located. It shows as a separate line on your invoice and is remitted to the state revenue office, not kept by your broker or insurer.
What is a sub-limit?
A sub-limit is a cap on how much your policy will pay for one specific type of loss inside a broader section of cover, even though the overall sum insured is higher. A common example is a cap on cover for portable contents like laptops or tools. On cyber cover, the scam-payment sub-limit is the one to check.
See cyber insurance cost.
What is subrogation?
Subrogation is your insurer's right, once it has paid your claim, to step into your shoes and recover its money from whoever was at fault. That might be a negligent contractor or a tenant who started a fire. It's why your insurer may ask you not to accept blame or sign anything with a third party before settlement.
What is the sum insured?
The sum insured is the figure you nominate as the maximum your insurer will pay for a total loss, and the number your co-insurance clause tests you against on a partial one.
How to get it right: our underinsurance guide.
What is underinsurance?
Underinsurance means your sum insured sits below the real cost of rebuilding your property. Only around one in ten Australian businesses think they're underinsured (Insurance Council of Australia research, 2015; Vero SME Insurance Index, 2025), but when quantity surveyors actually measure it, buildings come up about 24% short on average, and 31% short for industrial property (MCG Quantity Surveyors, 2024).
Full picture and the fix: our underinsurance guide.
What does "utmost good faith" mean in insurance?
Utmost good faith is the legal standard, written into the Insurance Contracts Act, that requires you and your insurer to act honestly and fairly with each other at every stage, not just when a policy is taken out. For you, it underpins the duty of disclosure. For your insurer, it means claims must be handled honestly and fairly, not searched for reasons to decline.
What is a vacancy clause, and how long can a commercial property sit empty?
Vacancy clauses restrict or exclude cover once a commercial property sits substantially empty, because an unoccupied building is a higher risk for fire, vandalism and undiscovered damage. On the small business policies Consolidated Insurance Brokers usually places, full vacancy cover is commonly standardised around 90 days. On a multi-tenancy building, the insurers' own question at underwriting is whether half or more of it is empty. Once you are on cover, most of the wordings we place keep the unoccupied-building exclusion off while the building is partly occupied. Tell your insurer about a tenancy change when it happens, not at renewal.
Full answer: commercial property insurance.
What is a write-back?
A write-back is your insurer adding a section or protection back into your policy that the standard wording would otherwise exclude, usually because a broker negotiated it.