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Insurance clauses in commercial contracts

Many commercial contracts include provisions requiring one or other of the parties to effect insurance. Such clauses are inserted into commercial contracts because the parties want to transfer to an insurer the financial consequences of one or more of the risks that may arise from the performance of the contract. However, as the case of Allstate Explorations NL v Blake Dawson Waldron [2010] WASC 97 demonstrates, each party must be careful to ensure that it properly understands the nature and extent of the insurance that is required to be effected, and to confirm that insurance cover of that nature and character is in fact available in the market.

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