We believe that it is not in the interests of either the client or the foundation contractor to have uncapped contractual liabilities on a project. If there is no cap on liability situations can arise where a client is left exposed in a situation where a large claim is made.

Whilst most organisations will provide some form of insurance to cover such liabilities, there can be situations where the available cover can be exceeded by a claim, or does not cover the type of claim, in which case the organisation responsible will be left to cover the gap between insurance cover and final claim value. In such circumstances, the gap between claim and insurance cover can be sufficient to bankrupt the organisation.

It is our view that seeking to cap liability should be seen as a fundamental part of an organisation’s governance and risk management, just as maintenance of insurance is.

Please download our position paper to find out more, including examples of potential large claims and relevant case law.