01 / The meaning
What it means.
A lease, construction subcontract or service agreement can contain indemnities, performance promises and obligations to pay another party’s costs. Some obligations may reflect liability that would exist anyway; others can expand it substantially. The heading insurance requirements does not establish that every promise can be insured. Read definitions, indemnities, limitation clauses and dispute provisions together.
Liability policies can restrict assumed contractual obligations or specify exceptions. A certificate showing a limit does not confirm that a broad indemnity clause is covered. Provide the full contract when seeking advice, ideally before signing. Consider whose negligence is included, whether the obligation is capped and whether it affects rights to recover from another party. Insurance assessment and legal advice on accepting the contract serve related but different purposes.
02 / Put it in context
A practical example.
Hypothetical example: a shopfitter is asked to reimburse a principal for all project delays, regardless of cause. It seeks advice on the proposed obligation and checks whether any relevant policy addresses that liability before agreeing.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Identify obligations that go beyond ordinary legal responsibility.
- Check indemnities, liability caps and recovery-right waivers.
- Compare the actual clauses with policy contractual-liability provisions.
04 / Start a useful conversation
A question for your broker.
Which additional liabilities would this contract create, and are they addressed by our insurance?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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