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Technology Insurance and Risk Specialists (978) 369-2771

Contract Terms are Challenging

The sign of a robust economy is the number of contracts we are asked to review for our clients. Boston is genuinely a hub of global technology services, contracting with some of the world’s largest enterprises.

Our review of clients’ contracts involve both advising on adequacy of limits, as well as specific comments on policy terms and clauses. Privacy & Security coverage is commonplace now, provided by specialty cyber-liability policy forms.

Some specifically troubling areas are clauses that stipulate that the entire client/vendor contract be an insured contract on the vendor’s policy, and clauses requiring the continuation of insurance for a number of years, usually three, following completion of the work.

The “insured contract” issue could easily run six figures in cost since intellectual property indemnification is standard in every contract and IP insurance is expensive. Contractual requirements for “continuation of insurance” are risky since there are no guarantees of insurability beyond the expiration of this year’s policy.

Being in non-compliance with your insurance requirements could be thorny should disputes arise over other aspects of your service.

Avoiding that requires advice, negotiation, and securing adequate coverage for compliance.

Nancy James

Nancy P. James is the principal of N.P. James Insurance Agency in Concord, MA, where she specializes in risk analysis and insurance for complex exposures. James is a licensed insurance advisor and frequent author and speaker in the technology risk arena, as well as counseling on home and auto liabilities. Celebrating 30 years in business, she can be reached at 978-369-2771 or www.npjames.com.