Effect of Lapse of Insurance Sample Clauses

The "Effect of Lapse of Insurance" clause defines the consequences that arise if an insurance policy required under an agreement is allowed to expire, is cancelled, or otherwise lapses. Typically, this clause outlines the responsibilities of the party required to maintain insurance, such as the obligation to promptly notify the other party of the lapse and to reinstate coverage as soon as possible. It may also specify remedies available to the non-breaching party, such as the right to procure substitute insurance and recover associated costs. The core function of this clause is to ensure continuous insurance coverage, thereby protecting both parties from uninsured risks and clarifying the steps to be taken if coverage is interrupted.