Ask the Editor

We keep being asked to sign Non-Disclosure Agreements (NDA) by clients and potential clients. If we sign these do we prejudice our insurance cover?

Many thanks for this interesting question. As NDA’s have become almost ubiquitous in business this is a query we see more and more often. We provide cover to the member when they perform their insured services in the “normal course of business”. This includes “contracting or endeavouring to contract on terms and conditions usually applicable for the performance of those insured services”. Therefore, as long as signing an NDA is within the usual course of business we would not take issue with a member signing one.

Please note that policy exclusions will still apply, so for example, take care to avoid agreeing to any punitive or exemplary damages and/or liquidated or contractual penalties.

In order to assist you to identify some usual terms in an NDA and avoid some common pitfalls, ITIC has produced an e-learning seminar which can be seen here.

As with any contractual document, we recommend you obtain your own legal advice before signing if you feel it is necessary.

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