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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 39023
Experience:  Retired (mostly)
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The following paragraph is included in a multi nationals

Customer Question

The following paragraph is included in a multi nationals contract to me as a consultant. I am a sole trader with £100,000 professional indemnity insurance and am a very small business (£10,000 turnover a year approx.). "The Consultancy Company shall indemnify
and keep indemnified the Company and any Group company against any liability, loss, damage, cost, claim or expense the Company suffers or incurs in respect of the Consultancy Company's performance (or non-performance) of the Services including in respect of,
but not restricted to, any act, neglect or default of the Consultancy Company, the Consultant, any Substitute or other person authorised by the Consultancy Company to act on its behalf." This seems to be a very unfair clause as a big company could take me
to the cleaners if they wanted to - as sole trader It would be a debt to me personally if I was sued. So my question is - is it reasonable to ask this part to be taken out? Or is it pointless because If I do make a mistake in my work they would still try to
get these terms from a court anyway? Or should I get them to agree to it but only up to a limit of my insurance at £100,000 In my industry as a scientific consultant we would normally have say £500,000 to £1 million indemnity coverage but this is a part time
business and I dont earn much money from it and have a low income anyway
Submitted: 2 years ago.
Category: Business Law
Expert:  socrateaser replied 2 years ago.


The contract language is absurd, in my opinion, because in effect the company is requiring you to purchase an unlimited amount of insurance to indemnify the company for its losses connected to any act or omission on your part.

I think that your idea of adding a "cap" (maximum liability) to the amount of liability insurance you are required to purchase would be a good fallback position. However, I would start by striking out the entire contract provision, and then try to negotiate to return more moderate language to the contract, such as: "Consultancy shall obtain and maintain professional liability insurance with minimum coverage in the amount of [amount], so as to indemnify company for any wrongful acts or omissions by consultancy throughout the duration of this agreement. Consultancy shall have no liability to company beyond the amounts covered under the policy. Upon reasonable request, and at least once each calendar year, consultancy shall provide company with confirmation from the insurer that the professional liability insurance policy remains in force, and with the herein agreed upon coverage."

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer -- otherwise, I receive nothing for my efforts in your behalf.

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Expert:  socrateaser replied 2 years ago.

Hello again,

I see that you have reviewed my answer, but that you have not provided a rating. Do you need any further clarification concerning my answer, or is everything satisfactory?

If you need further clarification, concerning this matter, please feel free to ask. If not, I would greatly appreciate a positive feedback rating for my answer -- otherwise I receive nothing for my efforts in your behalf.

Thanks again for using Justanswer!