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Few commom exceptions:

Some common exceptions/deviations often taken with respect to indemnity/liability/ insurance provisions:

No

Exception/Deviation by Tenderers

Client position

1

Tenderers could limit the indemnity only to the Client and not extend it to its other partners or joint venture or shareholders forming the Client company.

Having a Client group consisting of more than one legal entity, this exception is not acceptable since the various entities forming the Client are liable under the Contract to the Contractor.

2

Limiting the liability to a certain amount or percentage of the Contract Price.

While limiting the liability is a commercial issue, the exclusion of certain obligations of the Contractor has a legal basis. In accepting a certain limit, one should exclude certain Contractors liabilities that continue not directly related to the Works/Services under the Contract (e.g. of liabilities that continue are tax, confidentiality, intellectual property rights, infringements of copyrights, etc).

3

Diluting limits of insurances stated in the ITT

Since the limits for insurance specified arise out of Clients risk assessment and regime, dilution of limits are not acceptable as they compromise Clients positions with respect to such issues.

4

Placing insurances at the time of assuming risks rather than at commencement of Contract.

Normally Contract provisions stipulate that Contractors submit required insurance covers at the start of the Contract even though the actual Works/Services could commence much later.
In such instances, a concession could be granted for Contractors submitting necessary insurances prior to assuming risks rather than at Contract start dates.

5

In cases where the Services are provided entirely at Contractors offices, insurance covers such as employers liability, third party liability and other insurances – Tenderers request for relaxation to limits upto those prescribed under the law.

Depending on the applicable law and Contract circumstances, insurances as per applicable law could be accepted.

6

Normally the Client insurance provisions stipulate that Contractors insurers waive their right of subrogation against members of the Client group. Insurers take exception this requirement.

Waiver of right of subrogation by Contractors’ insurers against Client group is a critical condition and should not be relaxed since insurers (or the ones who pay the insurance claims) would like to proceed against the entities who claim for insurance damages which is an exposure to Client.

7

Most often ITT provisions stipulate a broad requirement of insurances under Clients standard terms and conditions. Tenderers take exceptions to those provisions that are not applicable due to the nature of the Contract.
For example in a software license Contract insurance cover for removal of ship wrecks, disposal of unexploded explosives, etc.

Client standard insurance clauses should exclude covers that are not applicable to the Contract as any such clauses if included add unnecessary time and thereby could have a potential impact on the overall work schedule.

 

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