If a contract stipulates a maximum level for insurance cover, does that minimise my liability?

Q

If a contract stipulates a maximum level for insurance cover, does that minimise my liability?

A

It is important to separate liability from insurance. This is particularly when people talk about “liability insurance”.

To start with, it’s perhaps easier to explain if instead of “liable” we think “responsible for”.

There are a number of ways this can come about — the main ones are by statute law, by contract, or by tort. (A tort is a “civil wrong” that unfairly causes someone else to suffer loss or harm.)

Businesses, for example, are required under the Health and Safety at Work, etc Act 1974 to provide a safe place of work for their employees. However, a building contract may allow the parties to choose who is responsible for security of the site, or protection of existing structures.

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