Liability Coverage in Economic Downturns
In times of economic change, it is more important than ever to ensure your protection through thorough, seamless contracts. They should clearly outline both parties’ obligations and discuss dispute resolution policies to avoid messy and expensive disagreements. An indemnity term can be included in contracts with foreign suppliers in which the supplier consents to the jurisdiction of U.S. courts and indemnifies its sellers in the event a claim involving one of its products. Remember, however, that this contractual indemnity is only as valuable as the manufacturer’s ability to pay.
It is never a good business decision to sign a contract hastily, but especially in difficult economic times, be sure to explore all risks and legal ramifications. Small companies who partner with larger companies are often strong-armed into making decisions with which they are not completely comfortable.
An economic downturn can be a turbulent time for businesses in every sector, worldwide. Sinking revenues and economic uncertainty can exacerbate the frequency of lawsuits in our already litigious society, and even companies that successfully weather economic downturns relatively unscathed can still face long-term risks.