Does your business deal with contracts? Safeguard your business today with contractual liability insurance.
If your business creates written or oral contracts on a daily basis, you’ll be aware of how specific and correct each contract needs to be. Whether you provide work for other firms or hire other companies, you’ve probably signed a contract containing an indemnity agreement. This is important to provide the right service, assure the client, and protect your business.
Any business who has had an issue with a contract will also know that they can be somewhat of a nightmare. That’s why it’s important to understand what you’re being held responsible with an indemnity agreement. This agreement, otherwise known as a hold harmless agreement, is a promise by one party to assume liability on behalf of someone else. It typically means that Party X agrees that if Party Y is sued by Party Z because of Party’s X’s negligence, Party X will indemnify (reimburse) Party Y for costs that result from Party Z’s lawsuit.
Many business owners engage in contracts that contain indemnity agreements for property leases, equipment leases, and construction agreements. The liability that you assume under such contracts is automatically covered by the standard general liability policy.
Contractual liability insurance involves the financial consequences emanating from liability, and not the assumption of the indemnitee’s liability itself. The financial responsibilities, such as money damages, are transferred by the Indemnitor to the indemnitee.
In addition, there are certain exclusions that apply to bodily injury or property damage for which the insured is obligated to pay damages by reason of the assumption of liability in contract or agreement.
For the best chance of protecting your business in the event of a contract breach, negligence, or issue, contact Chambers & Company Insurance Brokers for all of your commercial insurance needs in California!