Glossary
Binder
A temporary insurance contract that provides coverage until the formal policy is issued, typically used while the application is being underwritten.
Binders are issued at the point of sale when the client needs immediate coverage but the policy paperwork isn't yet complete. The binder is legally binding on the carrier for the period it's in force — usually 30 to 90 days.
From a reconciliation perspective, binders are a common source of error because premium may be collected before the policy number exists in the AMS. Matching that early premium to the eventual policy requires care and good linking practices.
Tracking the bind date is also important for commission timing — many carriers pay commission based on the bind date, not the policy issue date.
See also
- Premium Reconciliation — The process of matching the premiums collected by an insurance agency to the deposits and commission statements received…