Having adequate Employers and Public Insurance cover is very important for your business but you need to ensure that the insurances extend to cover the scope of works being undertaken.
Indemnity to Principal clauses satisfy a requirement in a contract for the contractor to provide an indemnity to a principal, or a requirement for the contractor to extend his liability policy so that the principal is indemnified as if he were the insured.
The standard indemnity to principals’ clause found on liability policies may not always suffice and thus the reason to request a specific indemnity e.g. a tenant in a building engages a contractor to carry out a fit out to the premises. In this case the principal is the tenant but how is the actual property owner protected in the event of a claim resulting from this fit out? Thus the reason to get a specific indemnity to the property owner on the contractors insurance. Important insurance terms can be misunderstood and cause problems with claims. Certain types of occupations may be required to have an insurance policy that offers indemnity to principals but confusing this with the general principle of indemnity could result in insufficient cover.
Remember – A general indemnity to principals clause on a liability insurance policy may not suffice thus the reason to request a specific indemnity in some cases.
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