Table of Contents
What is an invalidation clause?
In the event any provision of this Agreement is determined to be invalid by a court of competent jurisdiction, the remaining provisions of this Agreement remain in full force and effect.
What is non invalidation?
A non-vitiation clause (also known as a ‘non-invalidation’, ‘breach of warranty’ or ‘breach of condition’ clause) prevents the insurer from refusing to pay out even though it has a right to avoid the policy.
What is non vitiation clause in insurance?
A non-vitiation clause prevents the insurer from attributing any non- disclosure or misrepresentation or breach of policy by the insured to the lender. It may not be required in composite policies, as the insured’s and lender’s cover is distinct but each case should be looked at.
What does non imputation mean?
A non-imputation endorsement ensures that the company will not deny liability to the insured by reason of knowledge imputed to it through a partner, shareholder, or member by operation of law.
What is the difference between joint insured co insured and composite insured?
Composite insurance is distinct from, and should not be confused with, joint insurance. In joint insurance the parties have the same interest in the insurance, while in composite insurance the lender’s and borrower’s interests are typically distinct.
What is non imputation coverage?
“Non-imputation coverage” involves an endorsement to an owner’s policy insuring an entity against imputation by operation of law of knowledge of its partner, officer, director, or employee about unrecorded items affecting the title.
What is a Mezz endorsement?
The Mezzanine Endorsement (1) makes the Mezzanine Lender an assignee of payments under the Owner’s Policy not to exceed the debt owed to the Mezzanine Lender (but does not name the Mezzanine Lender as an additional insured) in paragraph 2 of the Endorsement, (2) provides Nonimputation coverage to the Mezzanine Lender …
What is the purpose of the subrogation clause?
Many construction contracts and leases include a waiver of subrogation clause. Such provisions prevent one party’s insurance carrier from pursuing a claim against the other contractual party in an attempt to recover money paid by the insurance company to the insured or to a third party to resolve a covered claim.
What is a Nonimputation endorsement?
Is a mezzanine loan a security?
Unlike a mortgage loan, which is secured by real property, a mezzanine loan is secured by a pledge of equity interests in an entity that owns real property and is governed by the Uniform Commercial Code (UCC).
Is mezzanine debt recourse?
While in general, mezzanine loans are non-recourse, most lenders will require that at least one financially responsible partner signs a carveout guarantee, with stipulations often referred to as “bad boy carveouts.” This means that, while the mezzanine lender cannot go after the borrower’s personal assets in the case …
What is a subrogation clause in an insurance policy?
What Is Subrogation? Subrogation is a term describing a right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. This is done in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss.
What is the difference between subrogation and a lien?
Subrogation. While liens involve a claim against a third-party recovery, subrogation is a distinct concept. In subrogation, the entity that covered the loss has the right to go directly against the responsible third party.
What does non-imputation mean?