insurance policy clause in contract insurance policy clause in contract
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  1. #1

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    Default insurance policy clause in contract

    Here is an excerpt from a well known agency's contract regarding limited liability, professional indemnity, public liability insurance etc.

    3.7 The Company shall have in place, policies of insurance of sufficient value to cover the provision of services pursuant to the agreement, including but not limited to Employers Liability, Professional Indemnity and Public Liability and which shall cover any loss suffered or incurred by the Employment Business and/or the Client and their respective officers or employees or any third party by the act of negligence or omission of the Company. ....

    What I'm wondering about is - what is sufficient value? When buying an insurance policy you can buy a £1 million worth of cover, £0.5 million worth of cover etc.

    The other point is the "including but not limited to Employment Liability, Professional Indemnity...." bit. How can anyone insure against any other types of cover if the type of cover you have to insure against isn't known?

    Perhaps these are moot points: I've never heard of an employer claiming against these types of policy. Has anyone?
    Last edited by sigma; 27th June 2014 at 09:04.

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    Quote Originally Posted by sigma View Post
    Here is an excerpt from a well known agency's contract regarding limited liability, professional indemnity, public liability insurance etc.

    3.7 The Company shall have in place, policies of insurance of sufficient value to cover the provision of services pursuant to the agreement, including but not limited to Employers Liability, Professional Indemnity and Public Liability and which shall cover any loss suffered or incurred by the Employment Business and/or the Client and their respective officers or employees or any third party by the act of negligence or omission of the Company. ....

    What I'm wondering about is - what is sufficient value? When buying an insurance policy you can buy a £1 million worth of cover, £0.5 million worth of cover etc.

    The other point is the "including but not limited to Employment Liability, Professional Indemnity...." bit. How can anyone insure against any other types of cover if the type of cover you have to insure against isn't known?

    Perhaps these are moot points: I've never heard of an employer claiming against these types of policy. Has anyone?
    It's just OTT verbiage planted by their lawyers to cover any holes that may or may not exist. Ask them what is sufficient, then amend the contract yourself and send it back minus the 'but not limited to' element. If they argue tell them they have to define the limits.

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    Quote Originally Posted by tractor View Post
    It's just OTT verbiage planted by their lawyers to cover any holes that may or may not exist. Ask them what is sufficient, then amend the contract yourself and send it back minus the 'but not limited to' element. If they argue tell them they have to define the limits.
    I have asked for a limit in the cover to be specified and the 'not limited to' bit removed. The agent responded after a couple of days of deliberation after my request went to the company directors and the legal team. Agent said that it is a "nil point situation". I'd never be sued for more than the amount of cover I had insurance for. That's a relief!

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    Quote Originally Posted by sigma View Post
    I'd never be sued for more than the amount of cover I had insurance for. That's a relief!
    So they'll have no problem in specifying a limit in the contract then.
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    Quote Originally Posted by TheFaQQer View Post
    So they'll have no problem in specifying a limit in the contract then.
    You might think so, but according to agent there is no need to change contract and so they won't.

    I will be turning down the role - apart from the unlimited cover required it doesn't work from an IR35 perspective either. Shame, it sounded a good gig.

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    Quote Originally Posted by sigma View Post
    You might think so, but according to agent there is no need to change contract and so they won't.

    I will be turning down the role - apart from the unlimited cover required it doesn't work from an IR35 perspective either. Shame, it sounded a good gig.
    Instead of just turning it down, it may be worth amending the contract in your favour one last time, including any changes required to negate IR35 and then sending it back with a cover note saying you are happy to accept it on those terms. You are not then turning it down, they are

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    Quote Originally Posted by tractor View Post
    Instead of just turning it down, it may be worth amending the contract in your favour one last time, including any changes required to negate IR35 and then sending it back with a cover note saying you are happy to accept it on those terms. You are not then turning it down, they are
    Sound advice! I will do that, thanks.

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    Quote Originally Posted by sigma View Post
    Here is an excerpt from a well known agency's contract regarding limited liability, professional indemnity, public liability insurance etc.

    3.7 The Company shall have in place, policies of insurance of sufficient value to cover the provision of services pursuant to the agreement, including but not limited to Employers Liability, Professional Indemnity and Public Liability and which shall cover any loss suffered or incurred by the Employment Business and/or the Client and their respective officers or employees or any third party by the act of negligence or omission of the Company. ....

    What I'm wondering about is - what is sufficient value? When buying an insurance policy you can buy a £1 million worth of cover, £0.5 million worth of cover etc.

    The other point is the "including but not limited to Employment Liability, Professional Indemnity...." bit. How can anyone insure against any other types of cover if the type of cover you have to insure against isn't known?

    Perhaps these are moot points: I've never heard of an employer claiming against these types of policy. Has anyone?
    The first two are a bit odd, as they should be telling you what the sufficient value is, i.e. most private companies are happy with £1m PL whilst public services usually want £2m, and also what cover is needed.

    Yes, I've seen many people have claims against their PI policy - any role where you give advice is a high risk; and lots of people claim on PL, particularly for inefficacy - I've done a number of contracts in insurance revolving around claims management and the link between brokers and underwriters so my view is a bit skewed. What I consider a huge number is only because it's covering the entire geographic base of the country over the past 6 years.

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    Contract would normally state the limit of damages. "Unlimited" is not something I would accept.

    It might be "the greater of £Xm and the total contract value" or something like that. My previous, contract drafted by the company's 'legal dept.', had "the lesser of £50k and the total contract value", duh!

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    Quote Originally Posted by Contreras View Post
    Contract would normally state the limit of damages. "Unlimited" is not something I would accept.

    It might be "the greater of £Xm and the total contract value" or something like that. My previous, contract drafted by the company's 'legal dept.', had "the lesser of £50k and the total contract value", duh!
    I don't understand how such nonsense can be written into a contract. But the client is a huge employer and possibly their legal "experts" had something to do with it.

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