‘Confirm Noted.’ Have you ever sent a contract to an insurer and received that as a response?
‘Confirm Noted’ does not mean that your insurers have agreed to cover potential liabilities arising from the terms of the contract. It simply means the insurer has noted the contract and any claim arising from that contract will be covered by your policy and subject to normal policy terms and conditions. Any contractual liability exclusions in your policy will still apply.
It’s very important that, before you enter into any contract, you consider the implications for your Liability Insurance protection. This can be a complex and technical subject but we’ll do our best to explain why.
With contracts, it is possible to agree to liability that, in the absence of that contract or agreement, you would not be liable for. This means a contract can impose liability on you that would not normally be imposed by the laws of the land.
There are many reasons why contracts may include additional liability that is over and beyond the laws of the land. This type of contractual liability is not covered by liability insurance. Liability policies will only cover where, in the absence of that contract, you would still be liable under the laws of the land. This is normally referred to as a Contractual Liability Exclusion.
A contract can have many implications for your insurance cover – and expose you to new risks that you may not be covered for. The issue discussed above is just one of them.
Before our clients enter into a contract, we strongly recommend that you consult with your legal adviser, and that you contact us as your insurance broker. The specialist brokers at Austinsure will review the contract for you and highlight what we believe are the key insurance issues for you. It may be that, in conjunction with your lawyer, you can get the terms of the contract amended to suit you better, recognising that certain contract requirements may not be insurable.
As a specialist insurance broking firm, Austinsure takes a consultative approach and works with insurers to find insurance solutions that meet specific needs for our clients.
If you’d like to know more about the implications of contracts on your liability insurance, or discuss any other business risks, please contact me or one of my colleagues at Austinsure.