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The Definitive Guide to Conditional Contract Insurance 

If you’re considering taking out an insurance policy to protect yourself against damages or loss due to theft or vandalism, then you’ll want to get the best possible policy at the lowest possible price. But how do you do that?

If you’re looking to lock in the insurance protection you need for your rental property, but don’t want to sign a long-term contract, then a conditional contract might be a great fit.

In this article, you’ll discover how to use a conditional contract to your advantage, get the protection you need without the hassle, and still save money in the long run.

As an insurance agent, you know that insurance can be expensive. If you don’t have a plan in place, it could cost you even more money. In this eBook, we’ll discuss what a conditional contract is, how it works, and what you need to know.

What is conditional contract

Conditional contract insurance is a way of protecting your business from a wide range of risks.

In a nutshell, it’s a type of insurance that covers you in case your business fails, or if you lose money due to a specific event.

The most common example of this is a business that is losing money, or failing. However, conditional contract insurance is not limited to just this. It can also cover you in case you suffer a loss from natural disasters, such as earthquakes, hurricanes, tornadoes, floods, etc. This insurance is designed to help you get back on your feet when things go wrong.

Did you know that Conditional Contract Insurance can help protect your company from losing money if you’re unable to fulfill the terms of your contracts?

In this guide, we’ll cover what Conditional Contract Insurance is, how it works, and why every business owner should consider purchasing it to protect their organization from losses associated with breaches in contract. If you have any questions, leave them in the comments below!

What is conditional contract insurance?

There are several names for these kinds of insurance policies. You may hear them referred to as personal contract insurance or business contracts insurance, but they all work on exactly the same principle: conditional contract insurance is a contract of adhesion that grants protection in situations where someone takes on responsibility without knowing all of their risks.

By making sure your business is covered, you’re protecting it against many unexpected events. If a personal tragedy, physical or legal event negatively impacts your business, conditional contract insurance will pick up where other types of insurance leave off.

It’s important to know that it only works under specific circumstances; there are instances when you won’t be able to use conditional contract insurance and those exceptions should be discussed with an agent before signing any agreements.

How much does it cost?

While not as expensive as some other forms of insurance, personal contract insurance is still a significant cost for most businesses. But what do you get for your money?

Well, it’s important to realize that protection against any and all risks does not necessarily mean you’ll be covered in every circumstance.

The standard pre-policy investigation process means that some conditional contracts can only be taken out after an event has occurred, thereby limiting what’s insured under those policies.

That said, there are a range of different types of policy that offer different levels of cover. The type you choose should depend on your individual needs and circumstances.

How do I get it?

Essentially, conditional contracts are insurance policies. That’s why they’re also referred to as insurance-backed guarantees. The idea is that if you make a contract with another party and an unforeseen event happens, you can use your conditional contract to protect yourself financially against that event happening.

For example, if you run a furniture store and sign an agreement with another company that allows them to place their product in your store, but one of their products gets damaged or is stolen before it’s sold (something outside of your control), then you have somewhere else to turn for compensation other than just your partner’s word. They may not be willing or able to compensate you adequately for your loss.

Read also: Can I reclaim insurance premium tax on my VAT return?

How do I make a claim?

If you want to make a claim on a conditional contract policy, you will need your original purchase documents, along with any supporting documentation such as receipts.

Keep in mind that these documents may be very hard to obtain if they were destroyed in a fire or flood, so it’s best not to throw them away after you’ve purchased an insurance policy.

In addition, when making your claim it’s always advisable to get in touch with your insurer and let them know as soon as possible. This ensures that you don’t miss out on an opportunity for early settlement and doesn’t give anyone else who could potentially make a claim against you an advantage.

Which companies offer conditional contract insurance?

Although conditional contract insurance is relatively uncommon, there are a handful of companies that offer it. For example, CoverHound and HUB International provide conditional contract insurance for new business customers and larger businesses.

While not all contractors will need conditional contract insurance, it’s important to know about it in case you ever do.

It helps protect your business if something goes wrong early on in your project or with a customer you’ve worked with before–such as when working on a building where structural damage was found during renovations, which required you to redo some of your work.

What does it cover?

When we buy car insurance, health insurance, or home insurance, we often enter into what is called a “contract of adhesion.”

The contract may not be written by us. It might be written by our lender (in the case of a mortgage), by someone selling us a product (like an airline selling seats), or it might be drafted for us by our employer (if you work for an organization with a health insurance plan).

Contracts of adhesion are sometimes referred to as “take-it-or-leave-it” agreements because they put all the risk on one party and offer limited negotiation options for consumers.


In conclusion, conditional contracts are an insurance policy that is triggered when certain conditions are met.

For example, a company might offer conditional contracts to its employees so that they can be paid in the event that their employer goes bankrupt.

However, conditional contracts have become increasingly popular in the world of business.

Conditional contracts are a great way of protecting your business against a range of risks, including:

  • Business failure
  • Unforeseen costs
  • Business relocation
  • Legal disputes
  • Product recall
  • Personal injury
  • Data loss

The key thing to remember about conditional contracts is that they only pay out if you have a claim. So, if you’re considering using conditional contracts to protect your business, you need to be sure that you’ll be able to make a claim if the worst happens.

You should also consider whether the risk you’re trying to protect against is likely to happen again in the future. If it’s highly unlikely that the risk will recur, then conditional contracts might not be the best way to protect your business.