business clique
you’re taking on under the base
contract. If you are at risk of being
sued for $5,000,000 and you are only
insured for $1,000,000 then you may
be vulnerable for the shortfall.
Similarly, insuring yourself can
be costly and unnecessary. If
you are only at risk to the tune
of $5,000,000 but you are insured
for $20,000,000 then you are
needlessly adding to your costs.
•
What is Covered – Exclusions
Exclusion is an express set of
circumstances that the insurer
will not cover under the policy.
Standard exclusions are written
into the ‘Policy Wording’ or into
the Policy itself, often excluding
circumstances of fraud, wilful
misconduct, recklessness, gross
negligence, or corruption. These
exclusions can also include industry
specific risks or likely events.
•
Subrogation
Subrogation is when the insurance
company steps into your shoes
to recover money paid under an
insurance policy. For example, if
Simon causes a claim to be lodged
against John's business, then John’s
insurer will legally pursue Simon for
reimbursement of the total claim cost.
John's contract may require Simon
to remove his rights of subrogation
against John. This may increase
Simon’s insurance premium.
PRINCIPAL'S INDEMNITY
Scaffolders are not covered under
a Plasterer's Liability Policy. To
protect himself John will have a
contract drawn up requesting
Simon to provide him with a
‘Certificate of Currency of Liability
Insurance’ which names John as a
principal on Simon's policy. This
allows John to make a claim on the
scaffolders’ policy if the scaffolder
is responsible for a claim.
Johns’ responsibility to provide
all of his workers with a safe work
environment.
In the event someone is injured
John may be held responsible. The
injured worker can claim against his
Workers Compensation insurer, who
in-turn will claim against John for not
providing a safe environment to work.
BIG TIP
Both John and Simon need to
provide the information to their
Insurance Broker and their
Commercial Contracts Lawyer
before they put pen to paper
Depending on what type of work the
subcontractor does will determine
if John wants to be named on their
policy. It could be a waste of time
for John to be named on another
Plasterer's insurance policy.
WORKER TO WORKER CLAIMS
When John discusses his
contract and policy with his
Insurance Broker they will look
at the Excess that applies to any
‘Worker to Worker’ claims.
‘Worker to Worker’ claims is
where one of John’s staff (or
subcontractors) causes injury
to another subcontractor. It is
AUTHOR
JODY WILLIAMS
Director - Oracle Group Insurance Brokers
www.oraclegroup.com.au
AUTHOR
ANNABEL HARDY
Laywer - Mcaulay Legal
www.mcaulaylegal.com.au
Women’s Network Magazine
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