A ‘hold covered’ agreement is a temporary agreement to insure a risk, usually used when a risk is not 100% placed, or an Insurer is not available to confirm cover.
Consequently such agreements are considered extremely dangerous and an Insurer should not be asked to ‘hold covered’ unless absolutely necessary. Any such request by PSC and subsequent agreement by the Insurer must be evidenced in writing with a clearly stipulated timeframe and acknowledgement by the Insurer that they are ‘on risk’ and the basis of cover. There must be Contract Certainty.
No-one should request a risk to be ‘held covered’ unless approved by Very Senior Personnel or the Head of Compliance. Any ‘hold covered’ agreement must be clearly communicated as such by PSC to the Client.
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