A terms of business agreement (TOBA) is a legal contract between an insurance broker and their client outlining the terms and conditions of their business arrangement. It is a crucial document that sets out the roles and responsibilities of both parties and provides clarity on the expectations each has of the other.
One of the most important aspects of a TOBA is the insurance provisions. This section outlines the type of insurance coverage that will be provided to the client and the terms under which it will be provided. It is essential that this section of the agreement is carefully drafted and reviewed to ensure that both parties understand the full scope of the coverage being offered.
The insurance provisions of a TOBA will typically include details on the types of coverage being offered, the limits of liability, and any exclusions or limitations on coverage. It may also outline the procedures for making a claim, including any documentation required and the timeline for submitting claims.
It is essential that the insurance provisions of a TOBA are clear and unambiguous. This will help to avoid any misunderstandings or disputes down the line, and ensure that both parties are fully protected in the event of a loss.
In addition to the insurance provisions, a TOBA will also typically include clauses relating to fees and payment terms, termination of the agreement, confidentiality, and liability. These clauses are also essential to ensuring that the agreement is fair, transparent, and comprehensive.
Overall, a TOBA is a vital document for any insurance broker and their client. It provides a clear framework for their business relationship, including the provision of insurance coverage. As such, it is essential that the agreement is drafted and reviewed by experienced professionals to ensure that it is comprehensive and effective.