Contract Risk Management: Insurance and Indemnities

Many contracts contain indemnities that are too broad to be enforceable, too narrow to protect, or inconsistent with the insurance that is supposed to back them. Liability caps and exclusions of consequential loss are drafted without understanding how local law will read them. Insurance requirements are listed in a schedule but not checked against the actual policies, and nobody confirms that cover remains in place. When a loss occurs, the parties discover gaps, overlaps and disputes between insurers.

This programme examines contract risk transfer as a connected system. It moves through five stages: analysing contract risk and the relationships between clauses, designing indemnity and liability regimes, understanding the insurance available in a contracting context, linking indemnities to insurance and drafting the clauses, and managing claims, recovery and disputes when a loss occurs.

Built on recognised practice. The programme references ISO 31000 for risk management, the risk allocation, indemnity, limitation of liability and insurance provisions of the FIDIC 2017 contracts (as reprinted in 2022 with amendments), and common market practice for construction, liability and professional indemnity insurance. It explains how common law and civil law systems can treat indemnities and limitation clauses differently, and where specialist legal and insurance advice is needed.

Decisions this programme improves. Which risks to retain, transfer or insure; what form and scope of indemnity to accept or demand; where to set liability caps and exclusions; whether a contractor's insurance programme is adequate; whether owner-controlled or contractor-controlled insurance suits a project; and how to respond when a loss or third-party claim arises.

How it is delivered. Twenty hours across five sessions, built around one running case: a major capital project with a main contract, key subcontracts and a service agreement. Participants map risk allocation across the contracts, review and redraft indemnity and insurance clauses, test the regime against loss scenarios and plan the response to a claim.

In-house option. For organisations, the programme can be tailored to your own contract templates, insurance programme and governing law, and delivered to contracts, legal, risk and insurance teams together so that clauses and policies are designed as one.

Who Should Attend

Contracts and commercial managers: heads of contracts, contract managers and commercial managers

Legal professionals: in-house legal counsel and legal advisers responsible for contract terms

Risk and insurance managers: risk managers, insurance managers and corporate insurance buyers

Project leaders: project directors and senior project managers on major projects

Procurement leaders: heads of procurement and tender committee members

Objectives

Analyse complex contract documents and the relationships between risk, liability, indemnity and insurance clauses

Identify and assess the main risks in a contract and decide which to retain, transfer or insure

Distinguish the main types and forms of indemnity and select the appropriate form for different contracts

Design an indemnity regime, including reciprocal and knock-for-knock arrangements where suitable

Explain the limitations of indemnity clauses, including legal interpretation and enforceability issues

Draft and review liability caps and exclusions of indirect and consequential loss

Describe the types of insurance available in a contracting context and what each covers

Link indemnity and insurance arrangements so that gaps and overlaps are avoided

Review insurance clauses and certificates for adequacy and consistency with the contract

Manage losses, insurance claims, recovery and related disputes using suitable resolution methods

Course Outline

Understanding Contract Risk and How Clauses Interact

Risk identification and assessment in contracts using ISO 31000 principles
Risk allocation principles: control, ability to manage and cost of transfer
Reading complex contracts: how risk, liability, indemnity and insurance clauses interact
Risk allocation in standard forms: the FIDIC 2017 approach
Common law and civil law perspectives on risk and liability
Contract risk registers and allocation matrices

Designing Indemnity and Liability Regimes

What an indemnity is and how it differs from damages
Types and forms of indemnity: broad, intermediate and limited
Reciprocal and knock-for-knock indemnity regimes
Limitation of liability, caps and carve-outs
Exclusion of indirect and consequential loss
Limitations and enforceability of indemnity clauses

Insurance in a Contracting Context

How insurance works: insurable interest, utmost good faith, subrogation and contribution
Construction and erection all risks insurance
Third-party liability, employer's liability and motor insurance
Professional indemnity insurance for design and consultancy
Marine cargo, delay in start-up and other specialist covers
Owner-controlled versus contractor-controlled insurance programmes

Linking Indemnities and Insurance: Drafting and Review

Aligning indemnities with insurance cover
Drafting insurance clauses: required covers, limits, deductibles and duration
Joint names, waiver of subrogation and cross liability
Reviewing insurance certificates and policy wordings
Subcontract flow-down and back-to-back arrangements
Monitoring cover through the life of the contract

When Losses Occur: Claims, Recovery and Disputes

Loss notification and insurance claims procedures
Coordinating contractual claims and insurance claims
Recovery from third parties and subrogated claims
Current thinking in dispute resolution: dispute boards, mediation and arbitration
Emerging risks: cyber, climate-related events and supply chain disruption
Action plan: strengthening contract risk transfer in your organisation

Competencies

Contract risk analysis and allocation

Indemnity regime design

Limitation of liability and consequential loss drafting

Construction and liability insurance understanding

Alignment of indemnities with insurance cover

Insurance clause drafting and certificate review

Subcontract flow-down of risk and insurance

Loss, claims and recovery management

Dubai

Elite Academy can deliver its complete portfolio of professional training programs in Dubai. With a global business, aviation and services hub with excellent international accessibility, the destination suits both scheduled learning and tailored arrangements for organizations or individual professionals. As an Elite Academy training destination, Dubai provides access to our full portfolio rather than a city-specific set of specializations. The city is a global business, aviation and services hub with excellent international accessibility, creating a suitable environment for organizations developing their teams and for professionals attending independently. Upcoming scheduled courses are listed on this page, while any other Elite Academy program can also be requested for delivery in Dubai, subject to scheduling and delivery requirements. Explore the schedule or browse our training areas to find the right option.