The Edge Series: What Does "Merger Clause" Mean?
Updated: Jul 21
The lawyers in our firm are focused on helping people with disability policies and ERISA claims. We want to give you the edge in understanding your policy. Today, we want to help you understand what the term "merger clause" means in your disability policy.
A merger clause is not a term labeled that way in a policy. It may instead be called a limitation of authority. That makes understanding a merger clause more challenging.
However, nearly every policy has one of these clauses. The intent of this term is to limit any responsibility and duty of the insurance company to only the language contained in the contract. It bars any oral statements or agreements.
The merger clause usually states: "Only the president, vice president, or secretary of our company has the authority to waive or alter any policy provision. Then, that must be signed and in writing by that officer."
Regardless of what an insurance agent, employee, or anyone from the insurance company tells you, the contract is not changed unless it is in a signed document.
The entire agreement is merged into the policy. Oral agreements or statements may provide evidence as to how the policy is interpreted when there is ambiguity. But, they don't necessarily change the policy terms.
The danger arises when people rely on statements from other people about their policy; however, if it isn't in writing, you can't count on it.
If someone lies to you about the policy, then you may have some type of claim against them, but it won't change the policy. If you cannot find the coverage you need in writing in your contract, then ask the agent or your employer to locate where that promise is found.