Download an Expense Agreement

Download .docx template

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Please read through the below which helps to explain parts of the excess policy example you can download above.

Concept

This expense agreement is a very short one-page contract between the underwriter and the proposed insured. This document is designed to make the proposed insured contractually responsible for any external fees incurred by the underwriter whilst underwriting the policy but before it has been purchased by the insured.

When the fee is due

Clause 3 lists the scenarios when the fee is going to become due. It makes it clear that the fee is still due if a policy is purchased but the fee is also due if a policy is not purchased or the transaction dies but the underwriter is not made aware of this.

Break fee

Clause 5 is example wording for implementing a break fee. A break fee is useful in situations where the proposed insured does not have exclusivity to purchase the target company and therefore there is a very real possibility a policy will never be purchased from the underwriter. The break fee allows the underwriter to still be paid a small amount in these scenarios.