* The language in the binder must be precise. * At the end of the binder s specified term, all coverage expires unless a new binder has been issued or the expired binder has been replaced with a policy. * The maximum and/or minimum term of a binder may be governed by state statute and/or company underwriting instructions. * All binders must conform to the state insurance code for the state in which the subject of insurance in located. Preparation must be complete and accurate. It is imperative that only authorized people prepare them. * The improper use of binders has become a major cause of producer s Errors and Omissions claims. Before issuing any binder, the following important considerations should be reviewed and considered carefully: * A Binder (Cover Note is some states) is a temporary insurance contract which provides coverage in advance of the issuance of an insurance policy. 1 ACORD 75 (2016/03) - Insurance Binder ACORD 75, Insurance Binder, addresses both Personal Lines and Commercial Lines risks, although most ACORD Personal Lines applications contain a "built-in" binder.
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