Delaware Business Insurance Update from CNC Insurance Associates " The Basics of Contractual Risk Transfer Read Before You Sign" 3-26-17

Every business owner sign numerous contracts during the course of business. One of the major provisions in most contracts is transfer of risk and or responsibility. What is common is the person or entity that lets the contract is trying to pass risk and liability on to the signer. So before you put your signature on another contract read it and look for  key words that will clue you in on what your agreeing to. Here are just a few.

"Any and all": when you see these words it usually is not good for a business owner. Someone in a contract is trying to make sure there are no issues you the signer won't be responsible for.
"By any cause whatsoever" : this is easily understood that what ever liability or risk that was being referenced in the contract , you the signer, are on the hook no matter what the cause of liability or risk is.
"Hold Harmless" :  this is a fancy way of saying you the signer are going to have to protect the entity that is having you sign the contract.
"Indemnify, or Indemnification" : these words show up all the time in contracts and they mean that you are going to have to financially make whole,  the contract entity you are going into a contract with.

These are just a few examples of words that you need to look out for. It is advisable to have your attorney and risk management professional help you decipher contracts. Having  to alter and or change your insurance policies and risk management practices to comply with an already signed contract , can be difficult , and also expensive. It is better to have discussions with your legal and risk team before signing.
Until next time be careful out there and know your risks.

G Kevin Nemith, President CNC Insurance & The Business Insurance Center
Serving DE, MD, PA, NJ, and VA
www.cncinsurance.com
www.bizinsurancetv.org

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