How do you check insurance covers a contract? How do you check insurance covers a contract?
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  1. #1

    Nervous Newbie


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    Default How do you check insurance covers a contract?

    I have bought professional indemnity, public liability and employers liability insurance from Qdos to cover my limited company.

    An agent has found work for me with a client and has given me a contract to review. I'd like to check that the insurance and the contact are compatible, i.e. everything that I am being asked to indemnify them for and take responsibility for is covered by the insurance I have.

    How do I do this? Qdos have an IR35 review service, but that doesn't seem to cover this. I am quite new to this and am not sure what such a service would be called. Does it have a name?

    How do contractors generally handle checking if their insurance is compatible with an agent or client's contract terms?

  2. #2

    Fingers like lightning


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    In my experience the contract just states minimum cover. Like £1m , £5m etc. This should be easy for you to determine. In any case the agent usually asks for your insurance certificate so they usually moan when you don’t have sufficient cover.

  3. #3

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    Right, the contract states minimum cover levels for insurance, and the insurance meets them. That part is clear.

    What I’d like to know is if the insurance covers all of the types of responsibility that the contract is asking me to take. For example, one clause states “Contractor warrants that the Services provided are not in breach of the intellectual property rights of any third party”.

    I am pretty sure that if I made a mistake and breached third party IP that this would be covered by professional indemnity. But I am not entirely sure. How do I check this, and all of the other clauses?

  4. #4

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    IMO you are way over thinking this. I don’t know any contractor who does this or a service for this kind of review.

    Maybe experienced contractors just know what red flags to look out for when reviewing the contract.

    If you’re really worried I’d say extract all the clauses you’re not sure about and contact the insurer directly to check cover.

  5. #5

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    Quote Originally Posted by sketchandsunshine View Post
    ... I don’t know any contractor who does this or a service for this kind of review. ...
    This is helpful to hear, thanks.

    I keep seeing it written that I should understand the contracts I sign. For example, on egos site, the legal consultancy I've seen recommended in other threads:

    · Rule 1: Make sure you understand the contract and all its implications before you sign.
    http://www.egos.co.uk/contractors.htm#revisions

    So in truth, is everyone just not really doing this? Is it like the iTunes or Netflix terms and conditions? We all sign or click to say we've read and understood them, but no one actually does?
    Last edited by peanutbutter; 27th January 2018 at 18:37.

  6. #6

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    Default How do you check insurance covers a contract?

    No. You really should understand each clause in your contract.

    But most people wouldn’t go through and check their insurance against each clause.

  7. #7

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    If you’ve got indemnity insurance from a mainstream provider then I’d assume you’re covered.

  8. #8

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    Quote Originally Posted by sketchandsunshine View Post
    You really should understand each clause in your contract.
    Putting the insurance cover aside, are there other things I should be looking for?

    How should I "read" a contract? Is there a guide to this anywhere?

  9. #9

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    Quote Originally Posted by peanutbutter View Post
    Putting the insurance cover aside, are there other things I should be looking for?

    How should I "read" a contract? Is there a guide to this anywhere?
    I’m not sure about a guide.

    I would say most of it comes down to experience but it’s worth getting it reviewed for IR35 and when you do ask questions about stuff you don’t understand.

    Or post specific questions here.

  10. #10

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    Quote Originally Posted by sketchandsunshine View Post
    IMO you are way over thinking this
    Agreed.
    Clarity is everything

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