We strongly support the efforts of our military and those companies whose products and services are aimed at public safety. Over several decades, we have been building experience and a thorough understanding of the complex issues facing companies involved in the Defence and Security sector.
Binks Insurance Brokers Limited is a proud member of the Canadian Association of Defence and Security Industries.
Product Liability: Many small to medium sized enterprises have difficulty in procuring Commercial General Liability (including Product Liability) to satisfy the terms of contractual requirements. Our understanding of the nature of defence and security risk has lead to successful negotiations with insurers and placement of coverage at realistic pricing levels.
Government Contractor Defense: Canadian based manufacturers often sell a large percentage of their product to the U.S. either directly to DoD or through a U.S. based prime contractor. Insurers may not be aware of the mitigating effect of the GCD “Government Contractor Defense”, which may significantly reduce the risk of product liability losses. (Ref: Boyle v. United Technologies Corp.)
SAFETY Act: For companies involved in the supply and distribution of Qualified Anti-Terrorism Technologies (ATT’s), DHS offers certain protections:
- Exclusive jurisdiction in federal court for suits against the Sellers of qualified ATT’s
- A limitation on the liability of Sellers of qualified ATTs to an amount of liability insurance coverage specified for each individual technology, provided that Sellers will not be required to obtain any more liability insurance coverage than is reasonably available “at prices and terms that will not unreasonably distort the sales price” of the technology;
- A prohibition on joint and several liabilities for non-economic damages, so that Sellers can only be liable for that percentage of non-economic damages proportionate to their responsibility for the harm;
- A complete bar on punitive damages and prejudgment interest;
- A reduction of plaintiffs’ recovery by amounts that plaintiffs received from “collateral sources”, such as insurance benefits or other government benefits;
- And a rebuttable presumption that the Seller is entitled to the “government contractor defense.”
Refer to www.safetyact.gov for further details.
Contractual Liability Issues: Negotiation of Indemnification, Hold Harmless and Limitation of Liability clauses prior to contract execution is an important component of your Product Liability risk management program. We strongly recommend a review by legal counsel of all major contracts.
Defence Base Act
The U.S. Dept. of Labor requires that personnel involved in work on military bases outside the United States be covered for injury while on the job. The act was amended to include public works contracts with the government for the building of non-military projects such as dams, schools, harbors, and roads abroad. A further amendment added a vast array of enterprises revolving around the national security of the United States and its allies. Today, almost any contract with an agency of the U.S. government, for work outside the U.S., whether military in nature or not, will likely require Defense Base Act coverage. (Reference: http://www.dol.gov/esa/owcp/dlhwc/lsdba.htm)
There has been much concern surrounding the issue of Canadian dual-citizenship for employees of companies with access to classified materials. In some cases, employees with dual citizenship will have to be dismissed or transferred. We are concerned that such actions may leave the employer open to claims of discrimination and highly recommend discussion with legal counsel on such issues. Companies should consider the purchase of Employment Practices Liability coverage to deal with the financial impact of discrimination claims. EPL coverage is sometimes offered as an integral part of Directors’ & Officers’ Liability coverage but may also be purchased on a stand-alone basis.
War Risk / Kidnap & Ransom
If your personnel are traveling into hostile areas, they need coverage for the benefit of their families and dependents. Most types of Group Benefits and Life Insurance policies specifically exclude the risk of injury and death caused by war or civil insurrection. We are pleased to provide specific coverage to fill the coverage gap. And if your personnel are kidnapped, you need a team of experts to help. Please refer to: War Risk for further information.
Supply Chain Management & Logistics
Because many parties may be involved in the delivery of goods and services to the end-user, it’s critical that your broker have an understanding of the relative liability of each party in the supply chain. This applies to several areas of risk, but most importantly in the areas of Product Liability and Errors & Omissions Liability. Depending on the terms of sale (INCO) it’s also important that coverage be properly arranged for goods while in transit and during storage.
If you have any additional questions, please do not hesitate to contact Geoffrey H. Binks , CAIB, CCIB, Vice-President Commercial Division (613) 226-1350