At Lexington National Insurance Corporation, we’re experts on providing insurance for service contract providers. So, we get lots of questions from those who are thinking of getting in to the service contract business, or for those who have never delved in to the insurance side. Let us explain some of the jargon.
The first question is: “I’ve heard the insurance I need called a CLIP, or a CLP, or a SCRIP. What’s the difference?”
CLIP – “Contractual Liability Insurance Policy”
CLP – “Contractual Liability Policy”
SCRIP – “Service Contract Reimbursement Insurance Policy”
The type of insurance needed for service contracts is governed by state law. Most states call the policies Contractual Liability Insurance Policies, but some just use the term Contractual Liability Policy. New York is the only state to use the term Service Contract Reimbursement Insurance Policy. In any event, they all do the same thing – satisfy the statutory requirement of protecting purchasers who make claims on service contracts.
So, now you know – CLIPs, CLPs, and SCRPIPs are just different terms for the same thing.
In our next post will talk about other CLIP terminology: First Dollar CLIP; Reimbursement CLIP; Failure to Perform CLIP; Insolvency CLIP.