A brief, provisional commitment, oral or written, that puts a risk on cover before the final policy is issued.
A binder, or cover note, is a provisional commitment by which an insurer or a managing general underwriter confirms that a risk is on cover from a given date, pending issuance of the final policy, whose full drafting can take several days or weeks, particularly for complex risks requiring sign-off from several underwriters or finalization of specific clauses. The binder captures the essential terms already negotiated, sum insured, premium, deductible and major exclusions, and legally binds the parties on the same terms that will appear in the final policy, making it a full contract rather than a mere promise, even though it sometimes runs to a single page or is confirmed orally under transaction time pressure. This mechanism is especially common in fast-moving underwriting markets such as marine insurance or M&A transactions, where an insured needs immediate proof of cover to secure a deal, for instance to close ship financing or complete a transaction, before lawyers and underwriters finish polishing every clause of the final contract.
An M&A deal must close within the week, but the warranty and indemnity insurance policy is not yet drafted in full detail. The insurer issues a binder confirming cover on the negotiated terms, pending the final policy.
note de couverture, binder, attestation provisoire