Professional indemnity clause example

Indemnity clauses in design and construction contracts. What is professional indemnity insurance clause? Is indemnity insurance legal? To illustrate how, we’re going to give you some real-life professional indemnity claim examples.

Specific claims vary by industry so it’s difficult to cover everything here. For example , marketing people don’t face exactly the same risks as IT people.

Such insurance shall be written by financially responsible companies selected by the Company and (except for automobile insurance) having an A. The service provider shall indemnify the customer against all actions, claims, losses and expenses in respect of loss or damage to third party property arising from the services supplied by the service provider. Professional indemnity insurance clause in conditions of engagement - Designing Buildings - Share your construction industry knowledge. An indemnity is provided where the supplier agrees to “indemnify” or exempt the recipient from the recipient’s Common Law liability in a written contract. However, despite its wide-spread application, it remains a clause which is often not fully understood.

Because of these differences, and in order to accurately define the extent of losses covere indemnity clauses require very precise drafting , and due to complex case law they are becoming increasingly detailed. Unlike public liability, professional indemnity policies do not usually contain a principals indemnity clause but often contain clauses excluding claims made by parties insured under the policy. The naming of a third party in the insurance policy may therefore mean that the policy would not respond to a claim made by that party.

This negates any benefit of the policy to both the insured and. They frame various clauses which help to define the indemnity agreement terms and conditions effectively. They include policy claims and arrangements and details about claims that can be made for any loss or damage. Whether an indemnity overrules the common law rules on remoteness or mitigation depends on the formulation and drafting of the indemnity clause itself.

If the indemnity is in relation to a debt claim (i.e. a definite sum of money payable on the occurrence of a debt) then the rules on remoteness and duty to mitigate do not apply – so the indemnity does provide a level of certainty in. Of all the contract clauses in professional services agreements, indemnification clauses have the most significant liability implications. It covers the cost of compensating clients for damage, loss resulting from negligent services, or advice provided. The manufacturer asks that an indemnity clause be included in the contract, in which the hospital agrees to protect the company from any losses or lawsuits should patients be injured while using any of the wheelchairs. An example of a hold harmless clause is: “The contractor holds the principal harmless from any action, claims, liability or loss in respect of the performance of the services.

If the retailer has a reputation for being unreliable or financially unstable, the factory may ask that they take out indemnity insurance to ensure regardless. These precedent clauses require a consultant (eg architect, engineer) to maintain professional indemnity insurance (PII) in relation to its appointment on a construction project. These clauses are intended for the consultant’s appointment but could be amended for inclusion in a building. With the exception of professional indemnity insurance, the obligation to be insured ceases after the defects certificate is issued. The insurance table (NECECC clause 8 and NECECC clause 8) lists four events against which the contractor is to insure with a minimum amount of cover.

Effectively these are the same as the contractor’s. In this context, there are several types: 1. Broad form indemnity agreements (this is also commonly refererred to as the “no-fault” agreements), is always common among construction contracts wherein any instances of damages or injuries will be placed on to the sub-contractors.

This clause excludes cover for an assumed liability of the insured by warranty, indemnity , guarantee or agreement, to the extent that it exceeds the liability the insured would have had under the general law in respect of the conduct in question, assuming it had still taken place. Insured during the Policy Period. The underwriting intention of the exclusion is not to exclude the primary form of liability to which the insurance. However, it could be argue for example , that the indemnity claim is a claim in debt, and that a debt is a promise to pay, not a liability.

Far better, therefore, to draft expressly and make it clear (either in the indemnity clause , or the limitation of liability clause ) whether or not the agreement cap limits the indemnity. Such PI or EO cover, as it is known, is intended.