Ask a Law Question, Get an Answer ASAP!
Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
Is this a personal guarantee please or an indemnity given by your company?
Thanks. And is it the "Individual" you provides the indemnity or PP Ltd in the contract?
thank you. They are not asking you to personally indemnify the other party. They are asking your company to provide the indemnity and therefore the indemnity will be limited to your company's liability rather than your own. This is not unreasonable because from the other party's perspective, your company is responsible for the work it carries out and is responsible for carrying sufficient insurance to cover the work. Some agreements contain personal indemnify clauses which makes the example you personally liable which are very unwise to agree to but it is quite usual for your limited company to be liable for work it carries out and to ensure it has adequate insurance cover to manage that liability. In fact the position would be much the same even without the clause
if you are keen to limit your company's liability then you would wish to change the clause he referred to above to provide for a specific limit of liability not to exceed the amount covered by your insurance policy have my feeling would be that the other party would not accept such a provision that such a provision would be unusual
the proposal does not make a mockery of the limited company liability structure you refer to because your liability would be limited to your company's liability and as you will be aware, except in certain very restricted circumstances, you were not personally liable for your companies liabilities unless you give a personal guarantee.
what is very important you are very cautious of is personal guarantees or indemnities of any kind as these run roughshod through limited company liability. Personal guarantees are often required by banks and other credit providers and a judgement call needs to be made in the circumstances they were least you have some control in terms of the amount of potential credit you are taking on. Liability clauses in contracts of this sort in my view should be avoided at all costs as potential exposure could have life changing impact. However providing you are satisfied that you have ample insurance, for the work you are carrying out, closes such as the above should not present difficulty is should in a worst-case scenario, you find that your insurance does not cover the potential exposure, the liability would be limited to your limited company and not you personally
is there anything above I can clarify for you?
A pleausre. I hope all goes well with your contract.
If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though