What Insurance is needed to Protect against a Contractual Dispute and breach of Contract?

There are generally two types of law when we talk about Civil Law covered under an insurance policy; Contract Law and Tort Law (which insurers know as negligence).

Tort Law is a civil wrong relating to a wrongful act or an infringement of a right, which poses unreasonable risk of harm on a person or their property, unfairly causing them to suffer injury or loss. The person who commits the act breaches their duty of care resulting in legal liability. Tort actions are not dependant on any specific agreement.

Contract Law involves the agreement of specific terms and obligations under a contract enforceable in a court of law, when promising to perform a task in return for a valuable benefit (known under contract as consideration). Where one party does not perform their obligations set out in the contract, they commit a breach of contract. A breach of contract is technically a failure to perform the contract in accordance with the terms.

If you contractually agree to meet obligations, specifications or deadlines you will need an insurance policy that provides cover for both Tort and Contract Law.

Premiums from online insurers may look attractive, however we tend to find that these direct markets may only provide cover for Tort Law, with Contract Law being excluded by way of a contractual liability exclusion. (Any claim arising out of any contract, unless such liability, would have existed in the absence of the contract).

For further information, please contact Adam Lawrence on 0118 916 5484 or complete an enquiry form.

*Information correct as of 1st May 2016

Author: Adam Lawrence | January 29th, 2014

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Adam Lawrence
Get in touch:   Reading: 0118 916 5480   London: 020 7036 8767   info@macbeths.co.uk