Contract Commitment to Carry Insurance fro a Definite Length of Time
Contract Commitment to Carry Insurance fro a Definite Length of Time
(OP)
I wanted to hear about the experiences of others when handling a client's request that the contract include a lengthy time commitment to carry insurance past the end of a project. Specifically, a request to carry General Liability and Professional Liability / E&O Insurance for 10 years? It may not be a big deal unless you want to change limits later, go "bare", or sell/merge/partner etc.
And now for my venting... Is this standard practice? I'm a bit annoyed that there appears to be more and more restrictive insurance requirements and contract language pairing up with lower fees.
And now for my venting... Is this standard practice? I'm a bit annoyed that there appears to be more and more restrictive insurance requirements and contract language pairing up with lower fees.





RE: Contract Commitment to Carry Insurance fro a Definite Length of Time
There's a chance that the provision relates to our state's statute of repose. It is 10 years.
If for some reason you dropped your insurance in a few years, you would then be in breach of contract, which is much easier to prove than professional liability.
RE: Contract Commitment to Carry Insurance fro a Definite Length of Time
Same way with the insurance. I'd say, "ten years is fine, as long as you send me a check every year to pay the premiums, you miss a payment and the insurance can lapse without breach".
David
RE: Contract Commitment to Carry Insurance fro a Definite Length of Time
Ron
RE: Contract Commitment to Carry Insurance fro a Definite Length of Time
RE: Contract Commitment to Carry Insurance fro a Definite Length of Time
RE: Contract Commitment to Carry Insurance fro a Definite Length of Time
I run into situations routinely where I would not sign a provision of a contract, yet XYZ engineer will do it and consider it risk management. To me, it hurts the profession for such ill-informed engineers to be doing work. Chances are if they don't understand basic contract liability, they have no clue as to professional liability, and perhaps have less competence as engineers in general...I know that's a broad brush, but it gets borne out in litigation all the time.
RE: Contract Commitment to Carry Insurance fro a Definite Length of Time
David