Payment of premiums clause: Copy, customize and use instantly
Introduction
A payment of premiums clause outlines the responsibilities for paying insurance premiums, ensuring the continuity of coverage throughout the term of an agreement. It ensures clarity and accountability, minimizing disputes related to lapses in coverage or financial responsibilities.
Below are templates for payment of premiums clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Responsibility for insurance premium payments clause
This variation assigns full responsibility to the Seller for paying premiums, ensuring the Buyer is not affected by lapses in coverage.
The Seller agrees to pay all premiums for insurance policies required under this Agreement, including liability, property, and workers' compensation insurance. The Seller will ensure no lapse in coverage and will provide proof of payment to the Buyer upon request. All associated costs will be borne by the Seller.
Premium adjustment clause
This variation accounts for flexibility in adjusting premiums due to changes in coverage or external factors.
If insurance premiums are adjusted due to changes in coverage or external factors, the Seller will bear any additional costs required to maintain adequate insurance coverage. The Seller will notify the Buyer of adjustments within [number] days and provide updated proof of coverage.
Non-payment consequences clause
This variation highlights the consequences of non-payment, protecting the Buyer in case of a lapse in coverage.
If the Seller fails to pay required insurance premiums, resulting in a lapse in coverage, the Buyer reserves the right to either terminate this Agreement or procure necessary insurance at the Seller's expense. The Seller will reimburse the Buyer for all costs incurred due to non-payment within [number] days of notice.
Advance premium payment clause
This variation mandates advance payment of premiums to ensure uninterrupted coverage.
The Seller agrees to pay insurance premiums at least [number] days in advance of the due date to ensure continuous coverage. The Seller will provide the Buyer with proof of payment upon request and will bear all associated costs.
Reimbursement for advanced payments clause
This variation allows the Buyer to recover costs if they pay premiums on behalf of the Seller.
If the Buyer is required to pay insurance premiums on behalf of the Seller due to non-payment, the Seller agrees to reimburse the Buyer in full within [number] days of receiving an invoice. The Seller will also cover any additional administrative costs incurred by the Buyer.
Shared premium responsibility clause
This variation splits the responsibility for premium payments between the Buyer and Seller.
Both parties agree to share the costs of insurance premiums required under this Agreement. The Seller will pay [percentage]% of the premium, while the Buyer will pay the remaining [percentage]%. Each party will provide proof of their respective payments upon request.
Premium pre-payment clause
This variation requires the Seller to pay premiums upfront for the entire term of the Agreement.
The Seller agrees to pay the total insurance premiums for the duration of this Agreement in advance. Proof of full payment will be provided to the Buyer no later than [number] days before the start of the Agreement. The Seller will bear all associated costs.
Penalty for late premium payment clause
This variation imposes penalties for late premium payments to ensure timely compliance.
If the Seller fails to pay insurance premiums by the due date, a penalty of [percentage]% of the premium amount will be charged for each [number] days of delay. The Seller will also bear the costs of any additional fees or charges resulting from the late payment.
Proof of payment clause
This variation emphasizes the Seller’s obligation to provide ongoing proof of premium payments.
The Seller agrees to provide proof of payment for all required insurance premiums under this Agreement at regular intervals, no less than [frequency]. Failure to provide proof within [number] days of a request may result in suspension or termination of this Agreement.
Automatic deduction of premiums clause
This variation ensures premiums are automatically deducted to prevent non-payment issues.
The Seller agrees to authorize automatic deductions for insurance premiums from their designated account on or before the due date. The Seller will ensure sufficient funds are available for each deduction and will bear all costs associated with this arrangement.
Buyer-paid premium reimbursement clause
This variation allows the Buyer to pay the premiums upfront and seek reimbursement from the Seller.
The Buyer may choose to pay insurance premiums upfront to ensure continuous coverage. The Seller agrees to reimburse the Buyer for the full amount within [number] days of receiving an invoice. The Seller will also cover any additional administrative costs incurred by the Buyer.
Premium payment installment clause
This variation permits the Seller to pay premiums in installments instead of a lump sum.
The Seller may pay insurance premiums in equal installments over the duration of the Agreement, with the first payment due no later than [number] days from the start date. The Seller agrees to provide proof of each installment payment and bear any additional fees associated with installment arrangements.
Annual premium review clause
This variation requires an annual review of insurance premiums to ensure adequacy and compliance.
Both parties agree to review the required insurance premiums annually to ensure coverage remains adequate and compliant with this Agreement. Any changes to the premiums will be communicated in writing, and the Seller will bear the costs of updated premiums.
Refund for unused coverage clause
This variation provides for refunds if coverage is no longer required.
If insurance coverage is terminated before the end of the Agreement, the Seller will receive a prorated refund for any unused premium amounts. The Seller agrees to apply the refund to other required coverage or reimburse the Buyer if applicable.
Premium escalation notification clause
This variation ensures the Buyer is notified of any premium increases.
The Seller agrees to notify the Buyer within [number] days of any premium escalation that impacts the required insurance coverage. The notification will include reasons for the increase and proof of adjusted payments. The Seller will bear the costs of the escalated premiums.
Multi-policy premium management clause
This variation applies to scenarios involving multiple insurance policies under the Agreement.
The Seller agrees to manage and pay premiums for all required insurance policies under this Agreement, including liability, property, and specialty coverages. The Seller will maintain a centralized record of payments and provide access to the Buyer upon request.
Grace period for premium payment clause
This variation provides a grace period for premium payments to avoid immediate coverage lapses.
The Seller will have a grace period of [number] days after the due date to pay insurance premiums without a lapse in coverage. If payment is not made within the grace period, the Buyer may take corrective actions, including procuring coverage at the Seller’s expense.
Dispute resolution for premium issues clause
This variation provides a mechanism for resolving disputes related to premium payments.
In the event of a dispute regarding the payment of premiums, both parties agree to resolve the issue through mediation or arbitration within [number] days. During the resolution process, the Seller will ensure continuous coverage by paying premiums in good faith. Costs for dispute resolution will be borne as determined by the arbitrator.
Premium adjustment cap clause
This variation limits the amount by which premiums can be adjusted during the Agreement.
The Seller agrees that any adjustments to insurance premiums during the term of this Agreement will not exceed [percentage]% of the original premium amount. Any adjustments beyond this cap must be mutually agreed upon in writing by both parties. The Seller will bear the costs of adjusted premiums within the agreed cap.
Advance notice of premium due date clause
This variation ensures the Seller is informed of premium due dates well in advance to prevent missed payments.
The Seller agrees to provide the Buyer with a written notice of all premium due dates at least [number] days in advance. This notice will include the amount due, the payment method, and proof of payment upon request. The Seller will bear all associated costs to ensure timely communication and payment.
Premium payment escrow clause
This variation uses an escrow account to manage premium payments and guarantee timely disbursement.
The Seller will deposit the full amount of insurance premiums into an escrow account managed by a third party. The escrow agent will disburse payments to the insurer on behalf of the Seller. The Seller will bear the costs of maintaining the escrow account and ensuring all premiums are paid on time.
Failure to maintain coverage clause
This variation outlines consequences if the Seller fails to pay premiums, leading to a lapse in coverage.
If the Seller fails to maintain insurance coverage due to non-payment of premiums, the Buyer reserves the right to procure the necessary coverage at the Seller's expense. The Seller will reimburse the Buyer for all costs incurred, including administrative fees, within [number] days of notice.
Premium reconciliation clause
This variation addresses premium adjustments due to policy changes or end-of-term reconciliations.
At the end of each policy term, the Seller agrees to reconcile any overpaid or underpaid premiums resulting from changes in coverage or adjustments during the term. Any owed amounts will be paid or refunded within [number] days of reconciliation. The Seller will bear the costs of managing this process.
Payment prioritization clause
This variation ensures premium payments take precedence over other financial obligations under the Agreement.
The Seller agrees to prioritize the payment of insurance premiums over any other financial obligations associated with this Agreement. Failure to prioritize premiums resulting in coverage lapses will be deemed a material breach of this Agreement, and the Seller will bear all associated costs to rectify the breach.
Proof of premium allocation clause
This variation ensures transparency in premium payments when multiple policies are involved.
The Seller agrees to provide a detailed breakdown of premium payments for each insurance policy required under this Agreement. This proof of allocation will be submitted to the Buyer within [number] days of each payment. The Seller will bear all costs associated with preparing and providing this documentation.
Premium payment installment approval clause
This variation allows installment payments but requires prior approval from the Buyer.
The Seller may request approval from the Buyer to pay insurance premiums in installments. If approved, the Seller agrees to ensure all installments are paid on time and to provide proof of payment after each installment. The Seller will bear all additional costs associated with installment arrangements.
Automatic renewal premium clause
This variation ensures that premiums are paid automatically for policy renewals to avoid lapses in coverage.
The Seller agrees to set up automatic premium payments for policy renewals, ensuring continuous coverage throughout the term of this Agreement. The Seller will provide proof of automatic renewal and bear all costs associated with maintaining this arrangement.
Premium payment monitoring clause
This variation requires regular monitoring and reporting of premium payments to ensure compliance.
The Seller agrees to monitor and report all premium payments to the Buyer on a [frequency] basis. Each report will include payment dates, amounts, and proof of payment. The Seller will bear the costs of implementing and maintaining this monitoring process.
Cancellation notice for unpaid premiums clause
This variation ensures the Buyer is notified if premiums go unpaid, leading to policy cancellation.
The Seller agrees to notify the Buyer immediately if insurance premiums remain unpaid and the insurer issues a cancellation notice. The Seller will bear all costs to reinstate the policy or secure replacement coverage to avoid a lapse in protection.
Premium payment contingency clause
This variation makes the effectiveness of the Agreement contingent on proof of premium payment.
The Seller agrees that the Agreement will not take effect until proof of insurance premium payment is provided to the Buyer. If payment is not made by the specified deadline, the Buyer reserves the right to delay or cancel the Agreement. The Seller will bear all costs associated with meeting this contingency.
Lapse prevention premium clause
This variation mandates safeguards to avoid premium-related lapses in coverage.
The Seller agrees to implement safeguards, such as payment reminders or automated payments, to prevent lapses in insurance coverage due to missed premium payments. The Seller will bear all costs associated with these safeguards and provide proof of implementation upon request.
Rolling premium adjustment clause
This variation allows for incremental adjustments to premiums based on updated risk evaluations.
The Seller agrees to adjust premium payments incrementally in response to periodic risk evaluations conducted by the insurer. Adjustments will be communicated in writing, and the Seller will bear the costs of all increased premiums resulting from such evaluations.
Early payment discount clause
This variation incentivizes early premium payments through discounts.
The Seller may receive a [percentage]% discount on insurance premiums if payments are made at least [number] days before the due date. The Seller agrees to provide proof of early payment to claim the discount and will bear all associated administrative costs.
Third-party premium payment clause
This variation allows a third party to pay premiums on the Seller's behalf, with reimbursement required.
The Seller may designate a third party to pay insurance premiums on their behalf. The Seller remains fully responsible for reimbursing the third party for all payments made, including any applicable fees, within [number] days of each payment.
Premium non-payment arbitration clause
This variation provides a dispute resolution mechanism for premium-related disagreements.
In the event of a dispute over unpaid insurance premiums, both parties agree to resolve the matter through binding arbitration within [number] days. During arbitration, the Seller will ensure coverage continues by paying premiums in good faith. Arbitration costs will be shared equally unless otherwise decided by the arbitrator.
Liability for premium penalties clause
This variation assigns responsibility for penalties resulting from late premium payments.
The Seller agrees to bear full responsibility for any penalties, fees, or additional costs incurred due to late payment of insurance premiums. The Buyer may deduct these amounts from any payments owed to the Seller under this Agreement.
Refund for excess premiums clause
This variation ensures the Seller receives refunds for overpaid premiums.
If insurance premiums are overpaid due to clerical errors or changes in coverage, the Seller will be entitled to a refund of the excess amount within [number] days of confirmation. The Seller will apply the refunded amount to future payments or request direct reimbursement.
Multi-insurer premium allocation clause
This variation applies when premiums are distributed across multiple insurers.
The Seller agrees to allocate insurance premiums among multiple insurers as required by the Agreement. A detailed payment breakdown will be provided to the Buyer within [number] days of payment. The Seller will bear the costs of managing and documenting this allocation process.
Premium alignment with coverage clause
This variation ties premium payments to coverage updates to ensure proportionality.
The Seller agrees to adjust premium payments proportionally in response to updates in coverage requirements. Any additional premiums due will be paid within [number] days of notification, and overpayments will be credited toward future obligations. The Seller will bear all administrative costs related to these adjustments.
Scheduled premium payment clause
This variation defines a clear schedule for premium payments to ensure consistency and transparency.
The Seller agrees to make premium payments according to the following schedule: [insert specific dates and amounts]. Each payment will be accompanied by proof of transaction and submitted to the Buyer upon request. The Seller will bear all associated costs to ensure timely adherence to this schedule.
Premium overpayment resolution clause
This variation provides a mechanism for resolving premium overpayments by either party.
If an overpayment of insurance premiums occurs, the Seller agrees to resolve the issue within [number] days of identification. Overpayments will be refunded or credited toward future obligations, depending on the Buyer’s preference. The Seller will bear any administrative costs related to the resolution process.
Multi-party premium distribution clause
This variation accounts for agreements involving multiple parties sharing premium responsibilities.
In agreements involving multiple parties, the Seller will be responsible for coordinating the distribution of premium payments to the insurer. Each party’s share of the premium will be clearly documented, and the Seller will provide proof of payments to all parties upon request. The Seller will bear all costs related to coordination and documentation.
Premium payment contingency fund clause
This variation establishes a contingency fund to cover premiums in case of financial difficulty.
The Seller agrees to maintain a contingency fund to cover insurance premiums in the event of unforeseen financial difficulties. The fund will be audited annually, and the Seller will bear all costs associated with its establishment and maintenance. Proof of the fund’s adequacy will be provided to the Buyer upon request.
Renewal premium notification clause
This variation requires timely notification of premium amounts for policy renewals.
The Seller agrees to notify the Buyer of renewal premium amounts at least [number] days before the policy expiration date. The notification will include detailed payment instructions and proof of the premium’s calculation. The Seller will bear all costs associated with ensuring timely communication and renewal.
Proportional premium refund clause
This variation ensures proportional refunds if coverage ends before the policy term concludes.
If insurance coverage is terminated before the policy term concludes, the Seller will receive a proportional refund of premiums for unused coverage. Refunds will be issued within [number] days of termination, and the Seller will bear any administrative costs related to the refund process.
Escalating premium cap clause
This variation limits annual increases in premiums to protect the Seller from excessive costs.
The Seller agrees to a cap on annual premium increases, not exceeding [percentage]% of the prior year’s premium. Any increases beyond this cap must be approved by the Buyer in writing. The Seller will bear the costs of any agreed-upon increases within the cap.
Premium verification audit clause
This variation ensures premiums are periodically audited for accuracy and compliance.
The Seller agrees to conduct annual audits of insurance premium payments to verify their accuracy and compliance with the Agreement. The audit results will be shared with the Buyer within [number] days of completion. The Seller will bear all costs associated with conducting and reporting the audit.
Fixed premium agreement clause
This variation locks premiums at a fixed rate for the term of the Agreement.
The Seller agrees to a fixed premium rate for the term of this Agreement. Any changes to the premium amount will require written consent from both parties. The Seller will bear all costs associated with maintaining the agreed-upon coverage at the fixed rate.
Premium payment dispute resolution clause
This variation provides a resolution mechanism for disputes over premium amounts or payments.
In the event of a dispute regarding premium payments, both parties agree to resolve the matter through mediation or arbitration within [number] days. During the resolution process, the Seller will continue making payments to avoid lapses in coverage. Costs for dispute resolution will be shared unless otherwise determined.
Policy-specific premium allocation clause
This variation ensures that premiums are allocated to specific policies when multiple coverages are involved.
The Seller agrees to allocate insurance premiums proportionately across all required policies under this Agreement. A detailed allocation report will be provided to the Buyer upon request, ensuring transparency. The Seller will bear all costs associated with managing and documenting this allocation process.
Premium payment contingency termination clause
This variation allows termination of the Agreement if premiums are not paid on time.
If the Seller fails to pay insurance premiums by the specified due date, the Buyer reserves the right to terminate this Agreement immediately. The Seller will reimburse the Buyer for any costs incurred due to the lapse in coverage and will bear all termination-related expenses.
Quarterly premium reconciliation clause
This variation requires regular premium reconciliation to ensure accurate payments.
The Seller agrees to reconcile premium payments on a quarterly basis to account for any adjustments or discrepancies. Any underpayments will be settled within [number] days of reconciliation, and overpayments will be credited toward future obligations. The Seller will bear all costs of reconciliation and related adjustments.
Premium grace period notification clause
This variation ensures the Buyer is informed of grace periods granted by insurers.
The Seller agrees to notify the Buyer of any grace periods granted by insurers for premium payments. Notifications must be provided within [number] days of receiving such information, and the Seller will bear all costs related to ensuring compliance during the grace period.
Shared premium liability clause
This variation specifies that premium payment responsibilities are shared between the parties.
Both parties agree to share the responsibility for paying insurance premiums. The Seller will pay [percentage]% of the premium, while the Buyer will pay the remaining [percentage]%. Each party will submit proof of payment to the other within [number] days of making their respective contributions.
Premium forfeiture clause
This variation addresses forfeiture of premiums if the Agreement is terminated early.
If this Agreement is terminated before its expiration, any premiums already paid by the Seller will be forfeited unless otherwise agreed in writing. The Seller will bear all costs associated with any premium adjustments resulting from early termination.
Premium credit rollover clause
This variation allows unused premium credits to roll over into subsequent policy terms.
The Seller agrees that any unused premium credits from the current policy term will roll over into the next term. A detailed account of credits will be provided to the Buyer, and the Seller will bear all administrative costs related to this process.
Premium installment penalty clause
This variation imposes penalties for late installment payments.
If the Seller fails to make an installment payment for insurance premiums by the due date, a penalty of [percentage]% of the installment amount will be charged. The Seller will also bear any additional fees incurred due to late payments, and coverage may be suspended until payments are brought current.
Premium offset clause
This variation allows premiums to be offset against other payments owed between the parties.
The Seller agrees that insurance premiums may be offset against any payments owed by the Buyer under this Agreement. A detailed offset calculation will be provided to both parties, and the Seller will bear all costs of documenting and implementing this arrangement.
Multi-year premium lock clause
This variation locks premium rates for multiple years to ensure stability.
The Seller agrees to lock premium rates for a period of [number] years, ensuring stability and predictability in coverage costs. Any adjustments after this period will be subject to mutual agreement, and the Seller will bear all costs associated with maintaining locked rates.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.