Common use of BINDING REQUIREMENTS Clause in Contracts

BINDING REQUIREMENTS. An insurance binder is a contract that temporarily affords coverage pending the issuance of a policy. Conditions of the binder should be identical to those shown on the policy. ▇▇▇▇▇▇▇ are issued by the underwriter through authority granted by their respective LOA. 1. All binders must be in writing and recorded in the appropriate systems, logs or bordereaux reports and issued within 24 hours of the effective date (unless coverage is backdated and has been approved by the appropriate Financial Lines Manager). Binders should include the name of the insured, coverage provided, policy term, limits of insurance, retention, premium, applicable policy terms, forms and endorsements and, if applicable, followed underlying policy and attachment point. Brokerage commission should be included in all binders. 2. All binders must be superseded by the issuance of a policy. The inception of the policy should coincide with the inception date of the binder. 3. Binders should be for a period not in excess of the policy period. A binder should not be issued under the following conditions: Ø Coverage is not authorized as part of the underwriting unit’s grant of authority. Ø Coverage is over delegated authority level, without appropriate approvals in writing. Ø Provide coverage that is not filed and approved in the state of domicile (if admitted paper) or provide coverage that is not in compliance with state regulations. Ø Underwriter is not in receipt and acceptance of critical quoting subjectivities. Conditional Binders may be issued pending receipt of requested materials but the relative importance of the information to the underwriting decision should be carefully weighed prior to issuance of the binder.