Advantage Talk - Need to Know (Contracts)
- 1. October 2016ISSUE 05Advantage Risk Solutions Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Firm reference number 629688. www.advantageuk.net For your own protection, you need to be sure you can comply with the terms of any contract. Common requirements are: Professional Indemnity which refers to your professional advice Public and Products Liability which refers to your liability towards members of the public and their property Pollution & Contamination cover which refers to your liability in respect of restoring damage following instances of pollution & contamination as a result of your work Cyber Insurance which refers to losses relating to damage to, or loss of information from, IT systems and networks EXPERT ADVICE. WAY ABOVE THE ORDINARY. Need to Know – Contracts ns, renovations, and extensions The Facts Businesses like yours enter into contracts every day. Contracts are vital in ensuring all parties understand what is expected of them in order to reach the desired outcome. But beware Contracts are often drawn up by your customers and, whatever the nature of your business, may require you to arrange and provide evidence of certain types and levels of insurance, which you may not currently hold.
- 2. October 2016ISSUE 05Advantage Risk Solutions Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Firm reference number 629688. www.advantageuk.net Want to know more? Let’s talk: t. 01256 483969 e. hello@advantageuk.net Any views or opinions expressed in this briefing are for guidance only and are not intended as a substitute for appropriate professional guidance. We have taken all reasonable steps to ensure the information contained herein is accurate at the time of writing but it should not be regarded as a complete or authoritative statement of law. Additionally, specific limits of indemnity might be required as well as explicit details about the length of time policies should be in force. This is particularly relevant to Professional Indemnity policies where cover is arranged on a ‘claims made’ basis which necessitates cover being in force at the time of the claim, not the time of the incident. What should you do? Quite simply, seek advice! It is not uncommon for contract terms to be negotiable if considered unrealistic or prohibitive. Whilst your insurance adviser is not a legal expert, they should be able to give guidance on the insurance specifications of contracts. Before you sign a contract, speak to your insurance adviser and they will advise you on the price, availability and suitability of particular insurance requirements. Client Story Situation: Company A provides services to several international airlines. When tendering for a new client’s services, they were sent a contract which they referred to both us and their legal advisers. Concern: The Liability limit of indemnity stipulated in the contract was $200,000,000. Their existing Liability policy carried a limit of indemnity of £50,000,000. If not addressed this would have left a significant shortfall in the event of a claim and mean they would be unable to provide the appropriate evidence of insurance necessary to meet the contract requirements. Resolution: We negotiated terms for an increase in their limit of indemnity in good time for the contract to be progressed. The clients also negotiated a reduction in the limit specified in the contract. This enabled the client to sign the contract with the peace of mind that they could comply with the contract terms and they were appropriately protected. If you are in any doubt as to the insurance requirements of a contract and your ability to meet those requirements, please get in touch. Your protection is our business. RELAX, WE SPEAK PLAIN ENGLISH