noun
premium
In plain English
What you pay for the insurance coverage.
Quoted as an annual amount but usually billable monthly, quarterly, or in installments. Premium is what you pay; deductible is what you pay first when a claim happens.
What it covers
The cost of the insurance contract, calculated based on exposure (payroll, sales, property value, etc.), rates, modifications (e-mod, schedule credits), and fees/taxes.
What it does not cover
Premium is NOT the same as cost of risk. Total cost of risk also includes deductibles, retentions, claims, and risk-management spending.
Where it trips people up
Audit premium can swing the final cost up or down. Quoted premium on workers comp or GL is usually estimated; the audit determines actual.
The technical version
The amount paid to an insurer in exchange for insurance coverage, calculated based on exposure, rate, and applicable modifications.