WARNING. STRIKING OR CHANGING THE LIMITATION OF LIABILITY AND THIRD-PARTY INDEMNIFICATION CLAUSES IN YOUR INDUSTRY CONTRACT MAY BLOW YOUR INSURANCE COVERAGE UNDER CERTAIN POLICIES OF INSURANCE.
BELOW IS A SNAP SHOT OF A “CONTRACTOR’S LIQUIDATED DAMAGES WARRANTY” ENDORSEMENT THAT I RECENTLY REVIEWED IN A POLICY OF INSURANCE ISSUED BY EVEREST INDEMNITY INSURANCE COMPANY. IN PLAIN ENGLISH, THIS ENDORSEMENT MEANS THAT THE INSURANCE WILL NOT APPLY IF YOU HAVE NO LIMITATION OF LIABILITY CLAUSE IN YOUR CONTRACT, OR MODIFY THE DOLLAR AMOUNT OF THE LIMITATION OF LIABILITY CLAUSE TO A SUM GREATER THAN THE AMOUNT YOU ARE PAID FOR YOUR WORK.
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IN MY EXPERIENCE, MOST INSURANCE POLICIES DO NOT CONTAIN THIS SAME OR SIMILAR “CONTRACTOR’S LIQUIDATED DAMAGES WARRANTY.” HOWEVER, BE SURE TO CHECK YOUR INSURANCE POLICY BEFORE AGREEING WITH A CUSTOMER TO STRIKE OR CHANGE THE LIMITATION OF LIABILITY CLAUSE.
MICHAEL J. REVNESS, ESQ., is the founder of AlarmLegal.com, and a founding partner at the law firm of KURTZ & REVNESS, P.C. Please contact me at michael.revness@kandrlaw.com or 610-688-2855 if I can be of assistance with the drafting security alarm contracts, purchase or sale of security alarm accounts or other related security industry legal services.
This article is for information purposes only and does not constitute, and should not be relied upon as, legal advice.