Glossary / Claims & duties / Tolling Agreement

Tolling Agreement

Also known as: tolling agreement · statute of limitations tolling · tolling of the statute of limitations

Claims & duties

A written agreement between parties to pause the running of the statute of limitations on a potential claim so they can investigate or negotiate before anyone files a lawsuit.

A tolling agreement is a contract in which parties agree to stop the clock on the statute of limitations, which is the legal deadline for filing a lawsuit. It gives both sides time to gather facts, discuss a resolution, or attempt to settle without either party being forced to sue just to protect its rights. For a startup, a tolling request often surfaces when a former employee, investor, customer, or vendor believes it may have a claim but is not yet ready to litigate. The insurance angle matters here: in many claims-made liability policies, such as D&O or E&O, the definition of "Claim" specifically includes a written request to toll or waive a statute of limitations, so receiving or entering into one can trigger your notice obligations. Because of that, a tolling request is not just a legal formality, it may be an event you are required to report to your insurer.

Related Terms

Claim Notice of Claim Notice of Circumstance Claims-Made vs Occurrence Directors and Officers Insurance (D&O)

Where you'll see it

ClaimPolicy

Why it matters for your business

  • Under many claims-made policies, a written tolling or waiver request falls within the definition of a Claim, so it can start your notice clock even though no lawsuit has been filed.
  • Failing to report a tolling request to your broker or insurer can jeopardize coverage, since late notice is a common reason claims are denied.
  • Founders and CFOs often treat a tolling agreement as a routine legal step, but signing one without looping in your insurer can quietly forfeit protection you have already paid for.

People also ask

What is a tolling agreement?

A tolling agreement is a written agreement in which parties agree to pause, or toll, the statute of limitations on a potential claim. This freezes the legal filing deadline so both sides can investigate the dispute or try to settle it without one party rushing to file a lawsuit to preserve its rights. It is a common tool in commercial and employment disputes, and it is often used before litigation begins.

Does a tolling agreement trigger my insurance notice obligations?

It can. Many claims-made liability policies, including D&O and E&O forms, define a "Claim" to include a written request to toll or waive a statute of limitations. If your policy uses that language, receiving or entering into a tolling agreement may count as a Claim and start the clock on your duty to notify the insurer. Check your specific policy wording, because definitions vary from carrier to carrier.

Should I tell my broker if someone asks me to sign a tolling agreement?

Yes. You should tell your broker or insurer promptly if you receive a tolling request, before you sign anything. Because a tolling request can qualify as a Claim under a claims-made policy, failing to give timely notice can give the insurer grounds to deny coverage later. Reporting it early preserves your rights and lets your broker advise you on next steps.

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Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.

Reviewed by Andrei Craciunescu, CA Licensed Insurance Broker #4467994

Last updated: July 2026.