Incidental Contract

Published: | Updated: May 24, 2018

Definition - What does Incidental Contract mean?

An incidental contract is a part of the coverage offered by a general liability insurance policy. It is listed under the provisions for indemnity. An incidental contract covers liabilities for a person or group hired by the insured to work on a project under the insured's name.

Insuranceopedia explains Incidental Contract

An incidental contract will come into play, for example, if a repair and rebuilding company is hired to remodel the interior of a building. If the remodel involves making changes to the electrical system, the company might hire an electrician as a contractor. If the electrician makes a mistake on the job resulting in faulty wiring, the incidental contract in the repair company's general liability policy will provide coverage for the legal costs associated with the contractor's error.

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