Gallagher’s conference workshop explained exactly what is and isn’t covered by an insurance policy. In this article, Nick Wilson and Mark Rubidge explain the key points for achieving a watertight contract.
In a survey of Airmic members registered to attend our conference workshop, 84% of respondents said that they were either concerned or very concerned regarding gaps which may exist between their contractual responsibilities and the coverage provided by their insurance policies.
As part of the same survey, 37% of members also commented that they did not collaborate with their legal teams enough to ensure a joined-up risk management approach to contract terms.
Within this article we explore the consequences of uninsured loss and what insureds can do to improve their risk management strategy.
Consequences of uninsured loss
It is important to remember that your contracts bind you, they do not bind your insurers. Therefore there is no guarantee that your insurers will indemnify you in respect of any claims. If insurers will not provide an indemnity:
Insurance cover response
No insurance policy will cover every eventuality arising under a contract and as such there may be areas of exposure for which you are not covered. Liability policies (public liability, product liability, cyber liability, professional indemnity) will generally require the existence of a legal liability. This is in contrast to many standard indemnity clauses found within contracts which:
Therefore it is essential that cover is specifically negotiated for contractual liabilities that are accepted by the business. As part of this process:
Conclusion
Having a good risk management strategy is crucial. This involves:
This article is based on a workshop presented at Airmic’s annual conference in Harrogate.
Nick Wilson, risk manager, Gallagher
Mark Rubidge, director, Gallagher