no-action clause
- A provision in an insurance agreement stating that the insurance company is not required to compensate until a legal decision has been rendered against the insured party
- If their insurance policy has a no-action clause, the insurer will only pay once a verdict is reached against them.
- The no-action clause in the insurance contract delayed the claim payment until judgment was passed.
- Due to the no-action clause, the insurance company waited for the court decision before making any payment.
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