contractual liability insurance policy (CLIP)
A contractual liability insurance policy (CLIP) is 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. It is a commercial insurance product that covers the contractual obligations of the insured (always a commercial entity).
Additional Information
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.
