What does a Contractual Liability Insurance Policy Cover

In the scenario of a Service Contract or Limited Warranty a Contractual Liability Insurance Policy (CLIP) covers liability of the insured assumed in a contract.  The Insured refers to the Provider, Obligor, OEM, Seller or other valid entity in the stream of sale.

The Insured makes a promise via a Service Contract or Limited Warranty and then purchases a Contractual Liability Insurance Policy to financially back the promise.

Many structures exist on how to back the promise but in the end an effective CLIP will ensure claims are paid in the future regardless on the status of the original company making the promise.