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 Contract Reviews |
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Contracts often contain insurance and indemnity clauses which provide that one of the parties to the contract must arrange various types of insurance with principal’s extension or named insured endorsements, cross liability clauses and waiver of subrogation clauses. Sometimes, the clauses require companies to obtain insurance, which is simply impossible to obtain in today’s market. The consequences for failing to arrange insurance as required by a contract can often be that the company itself becomes the insurer because it is liable for breach of contract. It must put the other party in the same position it would have been in, had the contract obligations been performed. Some organisations enter into contracts that are simply unfair and unconscionable. Indemnity clauses may require one company to indemnify another company for all losses no matter how those losses were caused. A review of the insurance and indemnity clauses in a company’s contracts may save the company from an uninsured loss and a broker from a dissatisfied client. |
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