Insurance binder

Definition

Temporary written proof of cover, issued before the policy itself arrives.

Why It Matters

A policy document can take weeks, and closings do not wait, so the binder is what a lender and a landlord accept at the table. It is a real contract with an expiry on it, usually 30 to 90 days, which is the part people forget: a binder that lapses before the policy issues leaves the business uninsured with paperwork that looks fine. Ask the broker for it in writing at least two weeks before closing and diarise its expiry date.

In numbers: A lender requiring $1M of liability cover and a loss-payee endorsement will close on a binder, then ask for the issued policy inside 60 days.