Are you signing away your cover?
After tendering, negotiating and working hard to secure a job, signing the Work Contract can seem like a mere formality, plus you've got insurance - so if anything goes wrong you're covered, right?
Many business owners are unaware that a typical Public & Products Liability (and most professional liability) policies actually exclude Contractual Liability coverage, unless specifically agreed by your Insurers on a per contract basis. However despite this fact, most work contracts will include specific contractual requirements within their Indemnity Clauses such as:
- Hold Harmless Agreements (i.e. "In the event we are at fault, you can't sue us")
- Onerous Indemnities & Warranties (i.e. "We are responsible for nothing, and your are responsible for everything")
By agreeing and signing to these conditions, you are signing away your insurer's rights of recourse and legal positioning in the event of a claim. If you have not had your insurer agree to these contractual requirements, your insurer will likely decline your claim as these are contractual liabilities which have prejudice the insurer's position in protecting you. Most Contracts will call on you to provide coverage for:
- Workers Compensation Insurance
- Public & Products Liability Insurance;
- Contract Works Insurance (also possibly Difference in Conditions, or Difference in Excess requirements);
- Motor Vehicle Insurance;
- &, Professional Indemnity Insurance.
For example you may have a $10,000,000 Public Liability limit where the contract calls for a $20,000,000 limit. In the event you sign a contract with a particular insurance requirement and you do not hold that particular coverage - this will put you in breach of contract and potentially open to litigation.
How Coverforce can help
Coverforce offers a contract review service to existing customers, as a value-add to our construction clients who are entering into contracts with principals, which will often contain various, and sometimes onerous conditions and requirements.
A review involves reading and passing comment on the:
- Indemnity Clauses
- Insurance Requirements
We are able to pass comment on both whether you have the required coverage in place, and whether your level of coverage is adequate.
Important Coverforce employs a qualified legal practitioner to provide desktop advice and recommendations; however the review service will contain information that is general in nature and is not, and is not intended to be, construed as legal advice.