WHERE IS DAVID LEE ROTH WHEN YOU NEED HIM? 11 FEBRUARY 2015 | PUBLIC & PRODUCT LIABILITY Late last year, Elevista ran a series of workshops that explored the legal intricacies of contractual indemnities and obligations to insure in commercial agreements. The financial and insurance consequences of getting these terms wrong, or failing to properly appreciate their impact, can of course be monumental for commercial parties and insurers alike in the event of a claim. Overwhelmingly the feedback from those sessions - from even the most 'seasoned' insurance professionals present - was one of surprise and concern at the level of complexity and technical knowledge needed to properly decipher even the simplest of terms. When every word or phrase in each unique agreement can be pivotal, it’s not hard to understand why. Van Halen understood the power of the contractual term... According to rock legend, the band used to include a clause in their concert contracts requiring the venue to place a bowl of M&M's, with all the brown ones removed, in their dressing room. David Lee Roth explained in his biography that its inclusion was a "test" to see if the organisers had actually read and actioned their terms and conditions. If the bowl was there, the band could assume that other more important terms (e.g. safety clauses) had also been actioned. If the bowl wasn't there (or brown M&Ms were in the bowl), they were immediately on notice that technical requirements may not have been met. If only contractual indemnity and insurance obligations (and their exposures) were so easily identified and resolved! One of the main lessons to be learned from recent Australian Court decisions in this area is the importance of going back to basics when considering the potential risk and insurance exposures created by contractual indemnity and insurance terms. At the top of the list should be ensuring that the of the agreement (whether its 2 pages or 222) is considered, so that all relevant terms can be identified and their meaning informed by the context of the entire contract. whole There can be no 'skimping' when it comes to contract reviews. bnlaw.com.au 11 FEBRUARY 2015

Where is David Lee Roth when you need him?

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Page 1: Where is David Lee Roth when you need him?

WHERE IS DAVID LEE ROTH WHEN YOU NEED HIM?11 FEBRUARY 2015 | PUBLIC & PRODUCT LIABILITY

Late last year, Elevista ran a series of workshops that explored the legal intricacies of contractual indemnities and obligations to insure in commercial agreements. The financial and insurance consequences of getting these terms wrong, or failing to properly appreciate their impact, can of course be monumental for commercial parties and insurers alike in the event of a claim.

Overwhelmingly the feedback from those sessions - from even the most 'seasoned' insurance professionals present - was one of surprise and concern at the level of complexity and technical knowledge needed to properly decipher even the simplest of terms.

When every word or phrase in each unique agreement can be pivotal, it’s not hard to understand why.

Van Halen understood the power of the contractual term...

According to rock legend, the band used to include a clause in their concert contracts requiring the venue to place a bowl of M&M's, with all the brown ones removed, in their dressing room. David Lee Roth explained in his biography that its inclusion was a "test" to see if the organisers had actually read and actioned their terms and conditions.

If the bowl was there, the band could assume that other more important terms (e.g. safety clauses) had also been actioned. If the bowl wasn't there (or brown M&Ms were in the bowl), they were immediately on notice that technical requirements may not have been met.

If only contractual indemnity and insurance obligations (and their exposures) were so easily identified and resolved!

One of the main lessons to be learned from recent Australian Court decisions in this area is the importance of going back to basics when considering the potential risk and insurance exposures created by contractual indemnity and insurance terms. At the top of the list should be ensuring that the of the agreement (whether its 2 pages or 222) is considered, so that all relevant terms can be identified and their meaning informed by the context of the entire contract.

whole

There can be no 'skimping' when it comes to contract reviews.

bnlaw.com.au11 FEBRUARY 2015

http://www.elevista.com.au/

Page 2: Where is David Lee Roth when you need him?

Barry.Nilsson.'s contract review service, PenSure Indemnity Check, is designed to you help navigate this legal minefield. As well as providing swift and practical legal advice, we also offer post-review legal services and in-house training to help support you through this difficult area.

More information is available on our website: www.pensure.com.au

GET IN TOUCH

MEGAN O'ROURKE SPECIAL COUNSEL

+61 7 3231 6358 megan.o'[email protected]

bnlaw.com.au11 FEBRUARY 2015

http://www.pensure.com.au/