Take My Word For It: Insurer Bound by Insured’s Oral Promise

It is rare that insurance coverage is provided based on an oral agreement. However, the Court of Appeals for the Seventh Circuit recently held that an additional insured endorsement allowed the policyholder to add insureds by oral agreement, regardless of when a written certificate of insurance verifying the addition was issued. The case illustrates the evidentiary dangers of broadly worded additional insured provisions that extend coverage by an oral agreement.

In this case, the putative additional insured, Vita Food Products, entered into a contract with …

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