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Insurance Good Faith Agreement

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Insurance Good Faith Agreement

This Insurance Good Faith Agreement (the Agreement) is entered into by the parties identified below for the purpose of establishing mutual obligations of good faith, cooperation, disclosure, and claims handling under the policy described herein.

Parties and Policy Identification

Applicant Name:

Insurer Name:

Policy Effective Date:

Policy Expiration Date:

Policy Details and Coverage

Policy Type (select all applicable):






Coverage Limit:

Deductible:

Premium:

Good Faith Obligations

The Applicant agrees to act in good faith and to cooperate fully with the Insurer in all matters related to underwriting, premium statements, investigations, and claims handling. Good faith includes, without limitation:

1. Promptly providing all material information, documents, and evidence reasonably requested by the Insurer; and not knowingly withholding or misrepresenting facts material to coverage or claim handling.

2. Cooperating in the preservation of evidence, allowing reasonable inspection of premises, and assisting in securing statements from witnesses when requested.

3. Refraining from intentional, reckless, or fraudulent conduct that would defeat or reduce the Insurer's obligations under the policy.

Applicant Representations and Warranties

Applicant represents and warrants that, to the best of Applicant's knowledge after reasonable inquiry, all statements contained in this Agreement and any disclosures made to the Insurer in connection with the policy are true, complete, and not misleading.

Applicant affirms the following (check to attest):



Claims and Notice Procedures

In the event of an occurrence that may give rise to a claim under the policy, Applicant shall provide prompt notice to the Insurer and shall supply the following information as available:

Documentation Checklist (attach as available):





Exclusions and Acknowledgement

Applicant acknowledges that coverage under the policy is subject to the terms, conditions, endorsements, and exclusions of the policy. Common exclusions typically include intentional acts, fraud, wear and tear, erosion, war, nuclear hazard, and insured-vs-insured claims where applicable.

Applicant confirms receipt of the material policy exclusions and agrees that the Applicant will not engage in conduct intended to trigger coverage that is excluded under the policy.

Beneficiary Designation

Beneficiary Name:

Indemnification, Remedies, and Fraud

Applicant agrees that deliberate misrepresentation, concealment of material facts, or intentional submission of false claims are grounds for denial of coverage, rescission of the policy, and recovery of any amounts paid by the Insurer, in addition to any civil or criminal remedies available under law.

The Insurer reserves all rights provided by the policy and law, including the right to seek restitution, attorneys' fees, and costs where Applicant's willful conduct or fraud has materially affected underwriting or claim disposition.

Confidentiality, Notices, and Governing Law

Information exchanged under this Agreement shall be used solely for the purposes of underwriting, claim handling, and risk assessment except as required by law. Notices under this Agreement shall be effective when delivered to the addresses provided above.

Certification by Applicant

By signing below, Applicant certifies under penalty of perjury that the statements contained in this Agreement are true and complete to the best of Applicant's knowledge and that Applicant will comply with all good faith obligations described herein. Applicant acknowledges that failure to comply may result in denial of coverage, rescission, or other remedies.

Certification:

Applicant/Insured:

Signature:

Date:

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What an Insurance Good Faith Agreement Is and when it applies

An Insurance Good Faith Agreement documents the parties' mutual obligations to act honestly, cooperate, and avoid unfair practices during claims handling and policy administration. Typically signed between an insurer and policyholder or between carriers and third parties, it specifies duties such as prompt investigation, timely communications, documentation of decisions, and dispute escalation paths. Although many states allow electronic execution, parties should confirm whether notarization or witnesses are required for their jurisdiction. The agreement is used to reduce ambiguity, support regulatory compliance, and create a clear record of the parties' commitments.

Why a clear Good Faith Agreement matters

A concise written agreement reduces disputes, clarifies timelines and responsibilities, supports regulatory reviews, and creates documentary evidence for claims and audits. It also documents reasonable procedures and good-faith efforts to resolve matters.

Why a clear Good Faith Agreement matters

Who typically prepares and signs this agreement

The Insurance Good Faith Agreement is used by multiple stakeholders across the lifecycle of a claim or policy administration.

  • Insurers and claims teams who need to document standards for investigation, notice, and payment.
  • Policyholders or claimants who want a written assurance of duties and communications timelines.
  • Brokers, agents, and third-party administrators involved in reporting and handling claims.

Roles vary by use case; include legal, compliance, and claims representatives where appropriate for authorization and signature.

Core sections to include in a professional Insurance Good Faith Agreement

A complete agreement balances practical operational details with legal safeguards; include clauses that define parties, scope, timelines, and remedies.

Parties

Identify each contracting entity by full legal name, business form, and contact information so responsibility and notice procedures are unambiguous between insurer, insured, and any third parties.

Effective Date

State the effective date and any retroactive application clearly; the effective date controls when duties and limitations begin for claims and statute-of-limitations purposes.

Scope of Duties

Describe the claims, policies, or transactions covered and list explicit obligations such as investigation timelines, information exchanges, and confidentiality responsibilities.

Claims Handling Procedures

Set step-by-step handling rules — initial notice, investigation deadlines, documentation standards, and escalation paths — to reduce misunderstanding and improve operational consistency.

Dispute Resolution

Specify remedy options, mediation or arbitration clauses, governing law, and venue to limit litigation cost and define how disagreements will be resolved.

Signatures and Authentication

Detail signing method (electronic or wet ink), required signer authority, any notarization or witness needs, and the record-retention approach for executed copies.

Essential fields to include at a glance

Policy Number: Unique identifier for the policy
Insured Name: Full legal name of the policyholder
Insurer Name: Legal name of the insurance company
Claim Number: Assigned claim reference when applicable
Effective Date: MM/DD/YYYY effective start date
Signature Block: Name, title, date, and signature

Step-by-step: completing an Insurance Good Faith Agreement

Follow these core steps to prepare, execute, and preserve the agreement correctly and consistently.

  • 01
    Gather documents: Collect policy, claim file, and identities for all parties.
  • 02
    Draft terms: Define scope, timelines, obligations, and remedies.
  • 03
    Review and approve: Have legal and compliance review before finalizing.
  • 04
    Execute and store: Sign with required authentication and retain certified copy.

How to configure the agreement for electronic completion

Configure fields and authentication to match the document's legal sensitivity and the parties' operational needs.

Authentication Email link, SMS code, or KBA depending on signer risk
Field Types Use required fields, date pickers, and read-only policy references
Conditional Logic Show clauses only when relevant using conditional visibility
Attachments Require supporting documents like proof of loss or policy declarations
Audit Trail Enable timestamp, IP capture, and certificate retention

Where to send executed copies and who receives them

Establish a clear distribution list and preferred delivery method for executed agreements to ensure traceability and compliance.

  • Primary Insurer: Send signed original to insurer claims file and legal counsel.
  • Policyholder: Provide the insured a fully executed copy for their records.
  • Agent or Broker: Deliver a copy to the broker if they facilitated the agreement.
  • Regulatory Filings: Submit to regulators only when required by state law or inquiry.

Distribution and digital signing: technical considerations

Choose a platform that supports secure delivery, required file formats, and an audit trail for regulatory review.

  • File formats: PDF, DOCX supported
  • Integrations: Salesforce, NetSuite, Microsoft 365
  • Authentication: Email, SMS, or stronger methods

Ensure your workflow preserves tamper-evident records, stores signed PDFs with audit metadata, and meets any industry-specific authentication or BAA requirements.

Common timelines and statutory response expectations

Timelines depend on policy language and state regulation; use this list as a practical checklist when drafting or responding.

Initial notice period:

Many policies require notice within 30–90 days of loss; check the policy language.

Investigation timing:

Insurers typically have 30–60 days to acknowledge and investigate a reported claim.

Payment or denial:

Some statutes require payment or written denial within a set period after proof of loss.

Document retention:

Retain executed agreements for the period required by applicable law and the retention policy.

Regulatory response:

Allow time for regulator requests—state insurance departments often set 30–60 day response windows.

Key processing milestones from draft to final record

Track these sequential milestones to ensure timely completion and avoid enforcement or compliance gaps.

01

Draft Completed

Agreement drafted and internal review scheduled.

02

Internal Approval

Legal and compliance sign-off obtained.

03

Execution

Signatures collected via chosen method.

04

Archive

Final document stored with audit trail and access controls.

Common preparation errors to avoid

  • Using informal or abbreviated party names that complicate enforcement and verification.
  • Failing to set a clear effective date and thereby creating ambiguity about when duties start.
  • Overlooking authentication or notarization requirements for the jurisdiction or document type.
  • Not retaining an auditable signed copy with metadata, which undermines legal proof of execution.

Potential consequences of an incorrect or incomplete agreement

Claim Denial Risk: May lead to denied coverage or delayed payments
Regulatory Action: State regulator fines and administrative penalties possible
Contract Breach: Creates exposure to damages and litigation
Statute Limitations: Incorrect dates can affect limitation periods
Reputational Harm: Poor documentation can damage trust with clients
Tax / Reporting: Incorrect records can affect tax and audit positions

Representative eSignature vendor comparison for executing this agreement

Below is a concise comparison of common vendor criteria. signNow appears first in the header per platform comparison conventions.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Free trial available Free trial available Free trial available Free trial available
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Real-world scenarios where a Good Faith Agreement is used

Examples illustrate how the agreement clarifies expectations and expedites resolution across use cases.

Insurer-Claimant Clarification

An insurer and claimant agree on investigation timelines and documentation requirements

  • This reduced repeated requests for the same documents
  • The documented procedures lowered processing disputes and provided a clear record during regulatory inquiry, improving transparency for both parties.

Carrier-to-Carrier Protocol

Two carriers set intercompany cooperation rules for liability allocation

  • The agreement specified notification windows and evidence sharing
  • Having a standing protocol avoided delays in subrogation discussions and expedited payments between insurers.

Frequently asked questions about Insurance Good Faith Agreements

Answers address enforceability, electronic execution, notarization, retention, and practical signing issues commonly raised by users.


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