Coverage in Place Agreement Definition
A coverage in place agreement (CIPA) is a contract between an insurance company and a policyholder to ensure that insurance coverage remains in place throughout a project or period of time, even when coverage is cancelled or expires. This type of agreement is often used in the construction industry, where projects can take months or even years to complete, and insurance coverage must be maintained to protect all parties involved.
CIPAs are vital in the construction industry because they protect contractors, owners, and other parties from unexpected losses or damages that may occur during the project. These agreements are typically entered into by the parties involved in the construction project, including the owner, general contractor, and subcontractors.
The CIPA specifies the types of insurance that are required for the project, the limits of coverage, and the duration of the coverage. It also includes provisions for how claims will be handled and who will be responsible for any deductibles or other costs associated with a claim.
In addition to protecting the parties involved in the construction project, CIPAs also provide protection for the insurance company. By requiring ongoing coverage throughout the project, the insurance company reduces its risk of unexpected losses caused by a lapse in coverage.
In order for a CIPA to be effective, it must be carefully drafted and reviewed by experienced insurance and legal professionals. The agreement must take into account the unique risks and challenges of each construction project and ensure that all parties involved are protected to the fullest extent possible.
Overall, a coverage in place agreement is an essential tool for managing risk and ensuring that insurance coverage remains in place throughout a construction project. By carefully drafting and implementing a CIPA, all parties involved can rest assured that they are protected from unexpected losses and liabilities.