Business Insurance Glossary: Terms to Know Before You Buy

In a fronting arrangement, the company named on your policy issues it and usually handles your claim, even when it transfers risk to a reinsurer.

A full-stack insurance group sells coverage and carries or underwrites risk through related companies; the seller and claims-paying insurer can differ.

An MGA can quote or underwrite coverage for an insurer, while the insurer named on your policy remains responsible for covered claims.

A National Producer Number is a nationwide ID for looking up a producer's licensing record. It isn't proof that the license is currently active, so confirm status separately.

An insurer’s admitted status depends on whether it is licensed where your risk is located; state protections after an insurer failure can differ.

An AM Best Financial Strength Rating is an opinion about a named insurer’s ability to meet policy obligations, not a guarantee that a specific claim will be paid.

A broker is licensed to shop the market on your behalf rather than represent one insurer, but the title alone doesn't tell you which company will actually issue your policy.

The carrier is the insurer legally responsible for paying claims, the name on your policy rather than the brand you shopped with. It can be an admitted insurer or a surplus-lines insurer, depending on the state.

A producer license permits a person or firm to sell specified lines of insurance in a state; it does not make that seller the insurer.