In insurance, a binder is temporary evidence of coverage before the policy is issued. A slip is a Lloyd's market document summarizing proposed terms for underwriters to initial. A policy is the final, formal contract. A bordereau is a periodic report listing individual risks, premiums, or claims under a delegated authority or reinsurance arrangement. Understanding these document types is essential for accurate extraction and compliance.
Key Takeaways
- A binder provides temporary coverage (typically 30-90 days) until the policy is issued
- A slip is a Lloyd's/London market convention where underwriters "scratch" to indicate participation
- A policy is the legally binding contract containing all terms, conditions, and endorsements
- A bordereau is a data report (premium or claims) used in delegated authority and reinsurance
- Each document type has different extraction requirements and audit implications
- AI must recognize document type to apply correct extraction rules
- Version tracking matters: binders must match final policies, slips must match placed terms
Document Comparison
| Document | Purpose | Binding? | Typical Length | Key Fields |
|---|---|---|---|---|
| Binder | Temporary coverage proof | Yes (temporary) | 2-10 pages | Limits, effective dates, insured |
| Slip | Lloyd's proposal/placement | When scratched | 5-30 pages | Lead %, following markets, terms |
| Policy | Final contract | Yes (permanent) | 20-200+ pages | All terms, endorsements, schedules |
| Bordereau | Periodic data report | No | Variable | Risk IDs, premiums, claims amounts |
What Ultrassure Does
- Automatically classifies documents as binders, slips, policies, or bordereaux
- Applies document-specific extraction rules for each type
- Reconciles bordereaux data against underlying contracts
- Tracks binder-to-policy conversion and flags discrepancies
- Extracts Lloyd's slip scratches and market participation percentages
Frequently Asked Questions
When should I use a binder vs waiting for the policy?
Binders are used when immediate proof of coverage is needed before the formal policy can be issued. They're common in commercial placements where binding decisions happen quickly but policy documentation takes weeks.
What happens if the binder terms differ from the final policy?
Discrepancies between binder and policy terms can create coverage disputes. Contract intelligence flags these differences automatically, ensuring alignment before the policy becomes effective.
How do slips work in the Lloyd's market?
A slip circulates among Lloyd's underwriters who "scratch" (initial) to indicate their participation percentage. Once fully subscribed, the slip becomes the basis for the final policy wording. Market Reform Contracts (MRCs) have standardized this process.
What information is included in a premium bordereau?
Premium bordereaux typically include policy number, insured name, coverage period, premium amount, commission, taxes, and risk location. They're submitted monthly or quarterly to the capacity provider.
How do I reconcile bordereaux with underlying contracts?
Automated reconciliation matches each bordereaux line item to its source contract, validates premium calculations, and flags discrepancies in coverage terms, limits, or pricing. This is essential for delegated authority oversight.
Can AI extract data from scanned slips?
Yes. Modern contract intelligence uses OCR combined with insurance-trained models to extract data from scanned slips, including handwritten scratches. Quality depends on scan resolution and document condition.
What is a Market Reform Contract (MRC)?
The MRC is a standardized contract format for London market placements, introduced to improve consistency. It has defined sections for risk details, coverage, exclusions, and contract certainty requirements.
How does Ultrassure handle these different document types?
Ultrassure automatically classifies incoming documents, applies type-specific extraction models, and maintains relationships between related documents (e.g., binder → policy, slip → wording, contract → bordereaux).