Contractual liability refers to liabilities you agree to under a contract, even if they wouldn’t normally be your responsibility under common law. Some contracts include clauses where you agree to “hold harmless” or indemnify another party for loss, damage, or negligence. 

Standard insurance policies may not automatically cover this extra responsibility. In fact, many have exclusions for contractual liability unless the insurer has agreed to the terms. 

Before signing contracts, it’s advisable to have your broker review any indemnity clauses. You may need to disclose them or negotiate the terms to avoid gaps in your cover. 

To learn more about contractual liability and its relationship to your insurance program, please visit our page on Contractual Liability Essentials.

If you require further assistance, please get in touch with us.