Point 1 - I think we are expected to come to this with approrpiate insurance. We maintain General Liability insurance with $2M limits and Professional Liability insurance with $1M coverage. Assume I cannot ask them for more funding.
Point 2 - That the contract should exclude acts of those representing the client, seems reasonable to me but is this stnadard language?
Point 3 - Excluding negligence, same as above. I guess I might be under a false impression that this is always in these contracts. Also assume that our PL insurance helps on this?
Point 4 - OK, good point but if misconduct is required to be proven, then who is defending ahead of this conclusion? In other words, are we on the hook for unlimited legal fees to defend against any allegation whether justified or not?
Point 5 - Limitations of damages, again I like this but have asked this before and been turned down. If our work causes say $1M damages to someone then how does this get reconciled against a $15K contract?
Good evening. It's not, in my experience, a reasonable provision to expect a Consultant to sign for a $15,000 contract. First, if they are going to require this, the client should increase the contract to allow the consultant to purchase liability insurance, including defense funds, to cover this risk. Second, it should exclude anything that also involves any acts of the representatives, employees, agents, contractors, etc. of the client. Third, it should be limited to willful misconduct or gross negligence, but not negligence. Fourth, it should require the willful misconduct or gross negligence to be proven, rather than simply alleged. Fifth, the limitations of damages should be limited to the total compensation received by the consultant.
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