Contingent Contract Protection
This unique contingency insurance product from Lloyd’s, London has the amazing ability to provide coverage for third party business needs that the domestic life insurance market cannot satisfy. Contingent Contract protection, as its name implies, reimburses the policy owner for contractual financial obligations triggered by any of the following events happening to the Insured Person:
- Death
- Disappearance or
- Permanent Coma
This product is an ideal alternative to life insurance for funding:
- Buy-Sell Agreements
- Share Redemption Agreements
- Divorce Contracts or
- Insurance requirements in a Loan Agreement
where the proposed life insured is uninsurable in the regular market for reasons such as:
- Medical or lifestyle history
- Criminal history
- Short term coverage requirements
- Participation in hazardous occupations or avocations
- International travel or residency in hazardous locations including war zones, or foreign citizenship
- Coverage is required immediately i.e. underwriting within 48 hours or while traditional insurers are completing their underwriting process.
| FEATURE | DETAILS |
|---|---|
| Structure: | Contingency insurance which reimburses a financial payment triggered in a contract due to death, disappearance or permanent coma of the insured person, solely and directly due to bodily injury or illness. |
| Amounts: | Up to $20 million any one life in house in addition to any amount justifiable with open market Lloyd’s placement. |
| Conditions: | Must be third party owner/beneficiary (no personal insurance) |
| Issue Ages: | Age 20 up to age 70 |
| Currencies: | Canadian or US dollars |
| Policy Terms: | Up to 2 years |
| Premiums: | Premiums are determined based on the specific risk profile of each case. |
Sample Cases:
Buy Sell, Medical Issue
A business required $10.5 million of coverage on one of the owners to fund the buy-sell provisions of the shareholder agreement. He was declined by the regular market due to a history of kidney disease. We provided $10.5 million Contingent Contract Protection coverage, with a kidney exclusion.
Loan Collateral, Travel Issue
A lender required $5M collateral life coverage on the chief technology officer of a corporation as a condition of the loan. He was declined by the regular market because of very extensive foreign travel, including travel into countries with significant civil unrest. We provided $5 million Contingent Contract Protection coverage without a travel exclusion including full war risk coverage.
Contractual Agreement, Immediate Need:
A Canadian company purchased a US corporation for $7M. Part of the purchase price was to be paid as an earn-out, payable over 3 years. The agreement specified that the entire remaining purchase price was to be paid immediately in the event of death or disability of the previous business owner. Coverage was required immediately as it was a condition of closing the deal. We provided Contingent Contract Protection (as well as disability insurance) to fund this obligation.
-
– Please request a quote through our online submission form. Submit the quote along with the completed application. We will not consider an application without this.
- Complete an Application Form – The required application forms will be provided to you with the quote. Please print, complete and have your client sign it before submitting.
- Please provide any financial information specified in the quotation. In some cases, this might be determined after receipt of the application.
- Complete any other forms or questionnaires indicated as required in the quote illustration.
- Scan and email the Application, signed Quote (and/or any other required questionnaires) to info@hunmcc.com. This will ensure immediate processing. Originals are not required. Please keep them for your records. If you cannot scan the documents, please fax or send a copy via Canada Post or courier to:
Hunter McCorquodale
1200 – 145 Wellington St. W
Toronto ON M5J 1H8
Toronto, ON
M5J 1H8
Fax: (416) 322-6846 - Include a copy of your current license and E&O insurance certificate with the application if you are not contracted with us. We will initiate contracting upon receipt of your first application.
IMPORTANT INFORMATION:
- We will not underwrite concurrently with another insurer.
- If a previous application has been declined within the last six (6) months, Hunter McCorquodale will obtain any available evidence from the declining insurer in order to expedite processing.
- If there is no previous decline, DO NOT order any medical evidence. All requirements will be obtained by Hunter McCorquodale. We will advise you what requirements are being arranged after the initial underwriting review.
- Do NOT collect a premium with the application. There is no temporary insurance.
- If the application is approved, the administrator will advise you how first payment may be made.