Overview of Indemnification Programs

A contractual liability insurance policy (CLIP) is an important financial instrument necessary to several industries. CLIPs are most commonly associated with service contracts but can be used in a variety of areas. It is a commercial insurance product that covers the contractual obligations of the insured (always a commercial entity). The CLIP protects business owners from claims due to contracts. When a business owner signs a contract, it assumes liabilities. This is known as contractual liability.

For example, let’s say you have an Indemnification Clause in your service agreement with clients. The agreement means your company will assume financial responsibility for claims arising from this indemnification. This is why contractual liability insurance is important. Without it, you’d have to cover claims out of pocket.

Captive Insurance Solution

To mitigate these risks, insureCap has introduced a captive insurance program, specifically a Contractual Liability Insurance Policy (CLIP), designed to protect against the financial implications of non-compliance with a Contractual Indemnification. This program aims to provide peace of mind through financial security and proactive risk management.

A CLIP can be used for any industry and can be custom designed to meet your specific needs. And to protect you against catastrophic claims, our program has access to commercial reinsurance.

Conclusion

The CLIP is one of the most flexible strategies to cover all types of indemnifications written into a contract. It further allows your company to leverage assuming 3rd party risk inside your captive. This could in turn allow for qualifications to tax benefits. Let the insuraCap team work with you to custom design a CLIP for your organization.