If a Fund Member provides a number of third party indemnities, in particular, to contractors performing work for the Fund Member, does Comcover take over these indemnities?
For the most part, the answer is no – Comcover underwrites only normally insurable risks. Indemnities are exposures voluntarily entered into by an agency and are not usually insurable in the commercial insurance market because, among other things, they may remove incentives to exercise a duty of care. However, any indemnities in place as alternatives to commercial insurance arrangements may be considered by Comcover on a case-by-case basis, but only after completion of a risk assessment and Fund Member acceptance of the additional exposure. For further information about issuing indemnities, see Guidelines for Issuing and Managing Indemnities, Guarantees, Warranties and Letters of Comfort, September 2003 [ 174 KB] and Comcover Coverage of Contract Indemnities [ 173 KB].
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