Mataracy
VIP Contributor
Cover note is temporary document given to the insured as an evidence of contract between the insured and the underwriter. Because the policy document and certificate of insurance normally take time before they are ready, a cover note is usually given, especially in motor and marine policies, to show that there is a binding contract between the two parties. The cover note performs the same role as a policy but the validity period is limited to a maximum of 30 days within which the policy document is expected yo be ready and delivered to the insured.
The acceptance of the offer of a prospective insured by an insurer is not , as we have seen, necessary automatic. The insurer may require sometime to consider it for its possible acceptance . But at the time, the prospective insured may need immediate protection or cover of the risk which is the basis of making the proposal in the first place. Perhaps as a compromise solution the insurer may be willing yo issue a provisional or temporary policy called a cover note.
Cover note are used mainly in general insurance businesses, such as motor, fire and burglary, etc.
The acceptance of the offer of a prospective insured by an insurer is not , as we have seen, necessary automatic. The insurer may require sometime to consider it for its possible acceptance . But at the time, the prospective insured may need immediate protection or cover of the risk which is the basis of making the proposal in the first place. Perhaps as a compromise solution the insurer may be willing yo issue a provisional or temporary policy called a cover note.
Cover note are used mainly in general insurance businesses, such as motor, fire and burglary, etc.