No-Action Clause Law and Legal Definition

No-Action clause is a clause seen in insurance policies. The clause bars suits against the insurer until the liability of the insured is determined by a judgment. This clause purports to indemnify or insure against loss from injuring the property or person of a third person, which provides in substance that no action shall be had on the policy to recover loss or expense, except as an action shall be brought by the insured for a loss or expense actually sustained and paid in money by the insured after the amount thereof has been fixed by final judgment or by agreement.