What Is a Manuscript Policy?

A lot goes into buying an insurance policy. You must make many decisions regarding your insurance policy. You need to decide what types of coverage you need, policy limits, the policy period, the insurance premiums and deductibles you can afford, and whom you should select as your insurer.

The insurance industry offers a range of insurance products to meet consumer needs. These include the following:

• Health insurance
• Automobile insurance
• Homeowners insurance
• Flood insurance
• Workers compensation insurance
• Life insurance

Most policyholders find the types of insurance they need with standard policies. Insurance can include health insurance for healthcare, auto insurance to protect against issues related to motor vehicle accidents, or a life insurance policy to cover loved ones upon death. The variety of standard insurance policies is seemingly endless.

However, some insurance consumers might have more specific needs that require a manuscript policy. Read on to learn about manuscript policies. This article explains how they provide specialized insurance coverage.

Manuscript Policy Defined

A manuscript policy is an insurance policy or endorsement tailored to the insured’s needs. A manuscript endorsement (or manuscript form) defines specific terms or conditions unique to a particular insurance policy or insured. A manuscript policy allows an underwriter to create wording on a policy unavailable on standard policy forms.

A standard policy includes standard terms applicable to all policyholders purchasing a particular type of policy. The only variations to the standard terms are on the declaration page. The manuscript policy, on the other hand, is custom-made for a particular person or purpose. The terms of the contract determine what the policy covers.

The underwriting process considers risk management and what the insurer and the insured have negotiated. This type of policy is more common among large commercial accounts or people exposed to particular types of risk.

Why Would You Need a Manuscript Policy?

An insurer might write a manuscript policy to include special types of coverage or add certain conditions. People or organizations choose manuscript policies over standard insurance contracts for several reasons, including the following:

• State law: In some jurisdictions, insureds need specialized language and terms to comply with state law.
• Special risk exposure: Unusual risks or specialized property may require a manuscript policy.
• Overbroad standard policy: An insured or insurer may decide that the terminology used in a standard policy is too broad for the insured’s needs.

For example, a commercial insured can negotiate a manuscript policy for product liability coverage. Standard terms might have a particular level of liability coverage, property damage, personal injury, or reimbursement for personal property. The company may negotiate a policy that meets its coverage needs for a particular product. Or a nonprofit may negotiate liability insurance for an event to provide coverage that a standard policy would not cover.

The Risks of Using a Manuscript Policy

A custom-made policy might help you achieve the exact coverage you need. But there are risks associated with a manuscript insurance policy.

Some manuscript policies don’t use industry-standard terminology. These terms and provisions may affect your coverage in significant ways. They may be to your disadvantage.

Non-standard terminology is not time-tested. The manuscript may contain ambiguous provisions without court precedent on certain coverage issues or terminology. This ambiguity could lead to expensive litigation.

Additionally, states have different insurance laws. Generally, insurance companies must file information regarding their insurance rates and forms with their state’s insurance department. The state insurance commissioners must approve the rates.

However, some states don’t require manuscript policies or endorsements to be filed with the state if issued to only one insured. Other states cap the amount at three insureds. This means that manuscript policies are not as heavily regulated as standard policies.

Less stringent filing requirements and the risks associated with non-standard contract provisions make it critical to get help. An independent insurance agent or attorney should review your manuscript policy before it’s signed.

Get Help With Your Insurance Policy

Even though you’ve purchased insurance, you probably hope you’ll never need to use it. If some unfortunate event does occur, you shouldn’t have to battle your insurance company over a legitimate claim.

Insurance laws require insurers to act in good faith. This protects the consumer from unfair insurance practices. If your claim has been denied, or you suspect bad faith, contact an experienced local insurance attorney. An attorney can review a manuscript policy before you purchase the coverage. They can also help explain and defend your insurance rights.