by Joanne » Wed Oct 10, 2007 10:11 am
We have public and products liability insurance of £5m. We are sorting out our insurance renewal, and our provider has listed an endorsement to insist that our sub-contractors have the same indemnity as us. We are checking what they have, but one at least only has £2m. How does this effect us?
Posted: Thu Oct 11, 2007 07:38 am Post Subject: my personal opinion
Hey!
Insurers now-a-days are too careful about their recovery rights...thats the reason they lay down so many rules while issuing you a policy!
I'd personally feel that the smaller contractors are ok to have 2 million pounds worth of indemnity in place.
Regards, Fatman
Posted: Thu Oct 11, 2007 08:57 am Post Subject:
Listen buddy, your indemnity limit has to show the maximum extent to which you are capable of inviting losses through your business. In your case it is good that you are sharing the responsibility to safeguard the property & ensure public liability too. It is worthy of the sub contractor to of a small operative size to hold a 2 m pounds indemnity. But its certainly not so anymore once he is under you. Once he has grown under you he needs to maintain it up to that level that you're maintaining. If not you may rest assured that your insurer's recovery process would be largely affected. Hope you got that. So either you need to eliminate him or else ask him to live upto your expectations to cover up the risk.
BurlyOldie
Posted: Thu Oct 11, 2007 09:55 am Post Subject:
Hi Joanne, to begin the construction work the contractor is required to show the certificate of liability insurance. A minimum liability limit of ₤2 million will help you to obtain the contact and begin the constructional work. But the minimum liability limit may not suffice the probable extent of damages that you may suffer during the work. You need to attune your coverage level with the size of the contract. Subsequently, your sub-contractors are also required to increase their coverage limit as well. And their policies need to be verified before the actual construction work beings. If a sub-contractor fails to produce enough coverage at the time of need, the cost of it will fall on you. It will affect your costs significantly……..as you can understand why. Rupert
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