ARTICLE · 09 MARCH 2019

Insurance clauses: Part 2 – Whats in a name?

McCullough Robertson

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This article examines the mechanisms that determine who is insured under a contract and how policies define the parties.

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WHO SHOULD READ THIS

Anyone involved in contract negotiations and procurement

THINGS YOU NEED TO KNOW

A named insured is entitled to make a claim under a policy but a party whose interests are 'noted' probably will not.
Insurance policies contain extended definitions of who is insured which can be triggered by the terms of commercial contracts.
Failing to effect insurance when a contractual promise has been made to do so will expose the maker of the promise to damages for breach of contract.

WHAT YOU NEED TO DO

Pay careful attention to insurance clauses in contracts and how they interact with indemnity clauses.
Where one party to a contract agrees to take out cover for others, make sure in advance that suitable cover can be commercially obtained and that the policy meets the contractual obligations.

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