a.m. best rating
Definition
A.M. Best is an independent company that grades insurance companies on their financial strength and ability to pay out claims. They assign letter grades similar to a report card, ranging from A++ at the top down to D, so you can quickly see how financially stable an insurer is before you buy a policy.
Example
Before buying business liability insurance, you check that the insurer has an A rating from A.M. Best, which tells you the company is in strong financial shape and will likely be able to pay if you ever file a claim.
Watch Out
Never buy a business insurance policy from a company with a low A.M. Best rating, because a financially weak insurer might not have the money to pay your claim when you actually need it.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.