Editor's Note: This blog summarizes an article on side agreements written by John Nevius, a shareholder and member of the insurance recovery practice in the New York office of Anderson Kill & Olick. Readers may obtain a complimentary copy of the Nevius article, which is being featured now on the Insurance Law Center, by clicking on the link at the end of this post.
You may have an insurance policy, but what about the side agreements? In obtaining basic workers compensation and general or auto liability coverage, policyholders of all stripes may be required to sign such things as Deductible Security Agreements, Payment Agreements for Insurance and Risk Management Services or Cross-Collaterization Agreements. Often, these “agreements” are presented as part of creative premium programs which transfer risk (and claim costs) back onto policyholders (“side agreements”). Call them what you will, but side agreements can lead to large losses and tie up credit. They also generally are subject to limited, if any, state insurance regulation.
Read the full article: Phantom Insurance: Don't Let Unregulated Side Agreements Haunt Your Coverage!