How to advise clients on commercial contract indemnities
Commercial contracts often contain indemnities, and brokers should be prepared to address issues pertaining to indemnities within those contracts.
Some clients may ask what an indemnity is. Simply put, it’s a promise to compensate another person for certain costs and expenses. And brokers are, of course, deeply familiar with one type of indemnity — insurance policies.
An indemnity is used to transfer risks from one party to the other, and since it’s contractual in nature, the wording will determine its scope and effect. Potential variations are unlimited.
Before discussing the particulars of a contractual indemnity, brokers should consider whether they’re comfortable giving the relevant advice. They should ask themselves, ‘Does the needed advice cover ordinary business, or is the question unusual?’
This article was originally published in Canadian Canadian Underwriter. Visit the Canadian Underwriter website to view the complete article.
This article is not intended to serve as a comprehensive treatment of the topic and is not legal advice. All legal matters are dealt with pursuant to their specific facts and circumstance. Nothing replaces retaining a qualified, competent lawyer.