Gavel to Gavel: Do you have insurance? Think again

The Journal Record
By Michael Laird
April 28, 2011

For good reason, no serious contractual relationship really goes anywhere unless the parties involved address potential liability issues and the related insurance coverage needed to cover them. Whether it’s a commercial lease relationship, a loan transaction, a services agreement or construction contract, as broad an array of potential risks as possible needs to be moved from the contracting parties to third-party insurers (within reasonable policy premium ranges). The concerns shouldn’t stop at direct risks. They should also extend to the risks of one party that are contractually assumed by the other.

With insurance, all too often people think that lawyers should get involved only when damage or injury is suffered, and insurance professionals only prior to either of these. Well, that’s not only half-right, it’s also downright dangerous. Expert legal review of the overall allocation of liabilities that can be direct, derivative or assumed by virtue of indemnification or hold harmless commitments – before signing of the relevant transaction documents – can be extremely valuable to clients, even though it may not necessarily be appreciated at the time.


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