A binder is a temporary authorization of coverage issued prior to the actual insurance policy. Binders should outline the same basic information the declarations page of the insurance policy including the name of the insured, the type of insurance coverage, the amount of coverage, coverage forms that will be attached to the actual policy and the name of the insuring company.Binders may be issued by an authorized agent or by the insurance company. A binder for property and casualty insurance binds the insurance company in the same manner as if a policy had been issued. Life insurance binders generally have a maximum that varies from company to company. Additionally, a life insurance binder is often not valid unless the insured would have been accepted at standard rates. Binders are not issued for health insurance.
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US: A legal agreement issued by either an agent or an insurer to provide temporary evidence of insurance until a policy can be issued. Binders should contain definite time limits, should be in writing, and should clearly designate the insurer with which the risk is bound. They should also indicate the amount of insurance, the type of policy, and (in the case of property insurance) the perils insured against.
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REINSURANCE: A record of reinsurance arrangements pending the issuance of a formal reinsurance contract which then replaces the binder.
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A temporary measure that provides coverage before a contract is finalized or before premiums are paid.
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A temporary or preliminary agreement which provides coverage until a policy can be written or delivered.
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US: A written or oral contract issued temporarily to place insurance in force when it is not possible to issue a new policy or endorse the existing policy immediately. A binder is subject to the premium and all the terms of the policy to be issued.
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REINSURANCE: An interim short form contract evidencing coverage, pending issuance by a formal reinsurance contract. See Placement Slip and Cover Note.
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Preliminary agreement by an underwriter, or Agent or broker with binding authority, to provide specified coverage until a Policy can be delivered. A temporary agreement that coverage is in effect.