In what form can a binder agreement be made according to standard practice?

A binder agreement serves as a temporary insurance contract that provides coverage until a formal policy is issued. In standard practice, a binder can be created in various forms, including both oral and written communication. This flexibility is important because it allows for immediate coverage to be granted to the insured without the need for a fully executed policy.

By allowing oral agreements, the insurance process becomes more accessible, enabling agents and brokers to provide instant coverage even in situations where a written document might not be immediately feasible. Written binders are also crucial, as they provide a tangible record of the agreement and the specific details of coverage.

This understanding underscores the importance of recognizing that both oral and written forms are valid and accepted means of establishing a binder agreement in the insurance industry.