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We are seeing more and more construction contracts with high standard excesses [$100,000 plus]

Who generally pays this excess or what mechanism is used to determine who pays it?

This is particularly relevant to the Natural Disaster excess of course but what about a fire, theft, accidental damage excess if this is now $100,000?

Crosslet Gates replies:

The excess represents part of a loss or liability that is not insured under a policy.

As the party suffering that loss or liabiilty has no insurance cover to that extent, that party suffers that loss or liability personally in the first instance. In some cases there may be an ability to pursue a liable party for the amount of the excess.

June 2023

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