Common Mistakes

It is very important to read and analyze the language of the contract. For example, consider the situation where someone has written into the verbiage a hold harmless agreement, where the expectation of both insured and third party is that the contract of insurance will provide protection, like so:

X Corporation hereby agrees to indemnify and hold harmless Y Corporation for any and all claims brought as a result of ____________.

The insurance contract does not provide coverage for any and all claims; it provides coverage for bodily injury, death, and property damage as declared within the terms and conditions of the contract. In a significant number of instances, neither insured nor their counsel or counsel representing a third party understand the separation of the insured risk and the contractual obligation.

Clearly, the contract between an indemnitee and indemnitor is a legal agreement to be found as law either at the time of execution or at point of adjudication. Likewise, the contract of insurance between an insured and insurer is also a legal agreement, subject to the terms and conditions of the insurance policy, which will be found as law either at the time of execution, loss, or adjudication.

© Copyright 2021. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.

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