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.
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