Slip Policy

What is a Slip Policy?

A slip policy is the standard placing document used in the Lloyd's and London Company markets to record and evidence a contract of insurance or reinsurance. The slip originated as a physical document — literally a slip of paper — that the broker would carry from underwriter to underwriter on the underwriting floor, collecting each underwriter's stamp, initials, and percentage line as a record of their participation in the risk. Despite the shift to electronic placement systems, the slip remains the foundational contractual document in London Market placements.

Once subscribed by the lead underwriter and any following markets, the slip constitutes the binding insurance contract. The full policy wording — a more detailed legal document incorporating all conditions, exclusions, warranties, and definitions — is issued subsequently and must conform to the terms agreed on the slip. In the event of any conflict between the slip and the policy wording, the slip terms generally prevail as the record of what was actually agreed at placement.

Components of a London Market Slip

A standard London Market slip includes: the insured's name and address; the class of business; the period of insurance; the insured interest or subject matter; the sum insured or limit of liability; the premium rate and estimated or deposit premium; the deductible or retention; the conditions (by reference to standard market wordings or bespoke clauses); the law and jurisdiction clause; and the subscriptions panel where each underwriter records their participation percentage and stamps the slip. For reinsurance slips, the cedant's details, the underlying business ceded, and the basis of the cession (proportional or non-proportional) are included.

London Market slips are drafted to standard formats defined by the Lloyd's Market Association (LMA) and the International Underwriting Association (IUA), with specific requirements for different classes of business. Electronic placing is now predominant through platforms including PPL (Placing Platform Limited), which replicate the slip-based contract structure in a digital environment while maintaining the same contractual functions.

The Slip as Legal Evidence

The slip serves as the primary legal evidence of the insurance contract. In coverage disputes, the signed slip is the document most likely to be produced in arbitration or litigation as proof of the agreed terms. Its accuracy is therefore critical: any error in the slip — a wrong sum insured, an omitted exclusion, an incorrect period — will be the starting point for any coverage argument. Brokers carry professional responsibility for ensuring that slips accurately record the terms agreed in the market, and underwriters are responsible for checking the slip before initiating or stamping their line.

Electronic Slips and Market Reform

The London Market's Target Operating Model (TOM) and Blueprint Two reform programme have accelerated the move to electronic placement, with the goal of having all risks placed and documented electronically. PPL is now the standard platform for electronic slip placement and subscription in Lloyd's. Electronic slips carry the same contractual force as paper documents but offer significant advantages in placement speed, data quality, storage, and retrieval — benefits that become particularly important in complex multi-line, multi-jurisdiction placements where manual slip preparation and management creates significant operational risk.