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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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A consultancy client is insisting that my company accept unlimited

Resolved Question:

A consultancy client is insisting that my company accept unlimited liability for professional indemnity in a contract with them. We are unable to insure this risk, but is there any way we could mitigate it?
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.
Alex Watts : Hello my name is ***** ***** I will help with this.
Alex Watts : Have you spoken to your insurers please?
Customer:

Yes, they will not insure an unlimited liability.

Alex Watts :

Hmmm - it really is a commercial decision for you.

Alex Watts :

Clearly if you accept an unlimited liability and there is a claim, your insurers will only allow those costs to their insured limit, you would have to pay for the difference.

Alex Watts :

There is simply no way to mitigate this.

Alex Watts :

This is an unreasonable term to insist on and you should refuse.

Alex Watts :

I can't see how many insurance company would allow this unlimited basis and therefore the client should not accept that either

Alex Watts :

But sadly there is no legal way to mitigate this, but it will be a commercial decision for you.

Alex Watts :

Investigate what losses they think they could suffer and see if that is within your insurance limits

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

Hmm, I assume an unlimited liability clause would actually be enforceable?

Alex Watts :

If this is a business agreement then yes

Alex Watts :

You dont have the same rights as a consumer

Customer:

OK, I see.

Alex Watts :

Can I clarify anything about this for you today please?

Customer:

No that is fine.

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