BINDER BASICS
What is the purpose of the Binding phase?
Binders act as the insurance contract until the policy is issued, so they must be accurate, checked for subjectivities, and properly signed before inception to avoid uncovered losses.
What a subjectivity is
A subjectivity is an insurer-imposed condition that must be met for coverage to be effective (or it can change/limit coverage if not met by a deadline)
If a subjectivity is vague
Request it be rewritten with specific requirements, deadlines, and consequences (avoid open-ended wording).
Describe the different stages of the binding process
Use a Confirmation of Binding Instructions (CBI) documenting the client’s choice (best before binding; at minimum before effective date), then obtain signed/dated carrier binders prior to inception (wet/fax/e-sign); file supporting email/fax evidence if used. Share binders with client
No binder available before inception
Get detailed written confirmation from the underwriter (email/fax) confirming binding (or referencing their dated proposal) and ensure it’s clearly from the underwriter/MGA; escalate if the underwriter won’t sign or provide a carrier binder.
What is a binder?
A binder is temporary proof/authorization of coverage issued before the policy; ideally prepared and signed by the carrier (even if Marsh drafts it) and should generally match the policy term.
Why subjectivities matter
Clear, time-bound subjectivities reduce misunderstandings and help prevent post-loss coverage disputes or after-the-fact changes/denials.
What to do when subjectivities exist
Notify the client in writing (including impact if unmet), follow up proactively until resolved, and complete any Marsh-owned actions within the stated timeframe.
Where to file binders (Exact folder)
File in Mshare as a Placement Document (per Mshare mapping/guidance).
Client hasn’t authorized binding before inception
Seek underwriter written confirmation extending the existing policy or “holding covered,” notify the client in writing with that confirmation; if a lapse is likely, warn the client in writing before expiry and explain remediation steps; once authorized, obtain the signed binder ASAP (no later than 2 business days).
What is a subjectivity?
A subjectivity is an insurer-imposed condition that must be met for coverage to be effective (or it can change/limit coverage if not met by a deadline).
Why subjectivities matter?
Clear, time-bound subjectivities reduce misunderstandings and help prevent post-loss coverage disputes or after-the-fact changes/denials.
How to confirm subjectivities are met
Obtain written underwriter acknowledgment that each subjectivity has been satisfied/resolved.
Binder signed by an intermediary
Only acceptable if the intermediary has explicit binding authority from the carrier (e.g., MGA agreement); obtain written proof if needed—wholesale brokers typically must provide a carrier-signed binder.
Binder about to expire and no policy
Do not allow lapse—obtain written underwriter confirmation extending the binder.