Cover note. A contract of marine insurance concluded when the proposal of the assured is accepted by the insurer, whether the policy is then issued or not. For the purpose of showing when the proposal was accepted, reference may be made to the slip or cover note or other customary memorandum of the contract, although it may be unstamped.
As soon as the insurance has been placed, the insurance broker advises his client accordingly by means of a “cover note”, stating the main points of the insurance affected. Prior to the issue of a duly stamped policy, the cover note is the only evidence of the contract of insurance. In practice the cover note is binding between parties interested.