In a recent article published in Hotel Executive, Chicago-based Partner Rob Schnitz examines legal best practices for using indemnity and insurance clauses to manage and allocate risk in commercial agreements.

Schnitz addresses how indemnity and insurance clauses can expose hotels to hidden risks if not properly evaluated. He explains, “Indemnity and insurance clauses are companion clauses in most commercial contracts that work hand in hand to apportion the relative risks of legal claims and losses that can arise in fulfilling the underlying purpose of the contract. Although these clauses are often viewed as standard language, they should be tailored to reflect the relative risks and interests of the parties in direct relation to the purpose of the contract.”

“Insurance clauses ensure that a party has the means to fulfill, at least in part, an indemnity obligation by identifying the type and amount of coverage needed by purpose of the contract,” Schnitz explains. “An indemnity obligation may become meaningless if the indemnifying party does not have the funds to cover a claim. Insurance clauses ensure that a party has the means to.”

To read the full article, click here.