Contractual Liability is a part of your insurance policy that specifically covers liabilities you have assumed under a contract or agreement. It's crucial in the home service industry, where contracts often include indemnity clauses requiring one party to compensate the other for certain kinds of losses or damages.
For instance, as a painting contractor, you sign a contract with a client that includes an indemnity clause. This clause holds you responsible for any damages arising from your work. If during the job, paint spills and damages expensive flooring, your Contractual Liability coverage would address any claims resulting from this damage, as specified in your contract.
Contractual Liability coverage is vital because:
- It aligns your insurance protection with the risks you agree to in contracts.
- It helps manage the financial implications of indemnity clauses or other contractual obligations.
- It enables you to enter into contracts confidently, knowing you're protected against specific liabilities.