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Contractual Liability Insurance Policy Clip

Contractual Liability Insurance Policy (CLIP)

Definition

Contractual Liability Insurance Policy (CLIP) — an important financial instrument necessary to several industries. CLIPs are most commonly associated with service contracts but can be used in a variety of areas. A CLIP is a commercial insurance product that covers the contractual obligations of the insured (always a commercial entity). A full reimbursement CLIP would indemnify the insured commercial entity for all monies it expends to fulfill a contractual commitment. The insured's need to procure a CLIP can be driven by a regulatory requirement or simple economics.

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