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One word can change the meaning of your contract

Confused_contract_2 Whether you are signing a lease for some office space, purchasing a home, bidding on a job, or selling your business, you’ll have to sign a contract.

When you do … be aware of the small print.

Many contracts have a hold harmless agreement or indemnity clauses that can cause future repercussions to you after you have signed your lease, completed your contracted work, or even sold your business.   

So what does this have to do with insurance?

Surprisingly it has a lot to do with it.

Often times there will be insurance requirement language as well as a request for the leasing company or business to be added to your policy. This is typically done through an endorsement.

Agents are often asked to add an additional insured to an insurance policy and/or provide clients with a certificates of insurance. This endorsement actually provides coverage to those additional parties should a loss occur and can protect their interest as well.

Now make no mistake, we are not attorney’s. However, your insurance agent should be your adviser to help you manage your risk.

Your agent should be aware of the language in your contract, not to advise, but to ensure that your policy is endorsed properly and that you are protected.

Managing risk is vital to any business owner. If you don’t have coverage in place when you need it, it can be detrimental to your business -- not only with liability, but with all other costs associated with a loss.

Most people only associate insurance with liability, but in reality it is so much more than that. It’s protection for loss of income, extra expenses you could incur, reimbursement for your property damage, defense coverage and more.   

Unfortunately, sometimes people don’t read their contracts before they sign them. Maybe they compare it to reading their insurance policy. A lot of words that may not make sense, so why bother?

What is really concerning is when they don’t have their attorney review it prior to signing. This is where problems can begin.

So the next time you enter into a contract, you may want to think about having an attorney look it over.

An attorney can consult with your agent, review and explain the contract to you and offer suggestions to make sure that your best interests are protected.

You may be surprised by this … but contracts are negotiable. So if you happen to find yourself entering into a contract and are seeing words like: 

  • any
  • all
  • persons
  • whatsoever
  • nature
  • whole
  • wholly
  • directly
  • indirectly

...you may want to seek your attorney’s advice prior to signing it.

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