A temporary agreement providing coverage while a formal policy is being issued — proof that insurance is in force in the interim.
Binder
A temporary agreement providing coverage while a formal policy is being issued — proof that insurance is in force in the interim.
A binder is a short-term document that confirms coverage is in effect before the full policy is issued. It states the key terms — insured, carrier, coverage, limits and effective date — and serves as evidence of insurance during the gap.
Binders are used when coverage must attach immediately but the carrier needs time to produce the policy.
- They are temporary, typically valid for a set number of days (often 30 to 90), and expire when the policy is issued.
- They can be issued by an agent with binding authority or by the carrier.
A binder carries real legal weight — it obligates the carrier to the terms stated — so issuing one accurately, and only within one\'s actual binding authority, matters for both the client and the agency\'s E&O position.