Some words have multiple meanings and when it comes to contract law, you will want to ensure that you know exactly what you are getting yourself into. The impact of misunderstanding a word or a misplaced punctuation mark, can have serious consequences.
While there are multiple aspects to a contract, in this instance we will cover the Subrogation Waiver or Hold Harmless Clause.
What is a Subrogation Waiver or Hold Harmless clause?
In its simplest form, this is when you agree to cover the costs incurred by another party even though you do not have the legal obligation to do so. This compromises your insurer’s rights to recover the amount incurred from another responsible party.
Clauses like these are generally incorporated into contracts for services and are more common within mining and earthmoving contractors. That being said, we have seen them being featured on a range of service contracts and equipment hire agreements.
Unfortunately, the vast majority of insurance policies do not automatically extend to cover liabilities beyond what is required under the law.
Signing a contract containing the Subrogation Waiver or Hold Harmless clause can have serious implications on your business and personal assets. With most insurers not providing coverage for extra liabilities, you are personally taking on this obligation and risk.
Unlike the majority of insurers, our HMIS policy automatically extends to cover this exposure under the Public Liability coverage.
Should you wish to have this cover added to your Plant and Equipment policy, we would be more than happy to.
Whilst insurance is a key asset in risk mitigation, we would also highly recommend seeking legal advice prior to signing any contracts especially if there are any terms or clauses you do not fully understand.
If you would like to receive personalised assistance in reviewing your existing contract, please do not hesitate to get in touch with a friendly broker at HMIS.
We provide a free contract review service to all clients, whether you are a current client already or you are seeking to become one.
You will benefit from the expertise of our Contract Law Specialist who will review your contract and identify any areas that extend your exposure beyond what is required by law or that is indemnified by your insurer.
Please note that while we provide this service free of charge, this process will usually take a few days.
Be sure to get in contact with one of our friendly brokers via 1800 629 701.