Consultation Paper Privity of Contract

(iii) Insurance contracts

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(iii) Insurance contracts

1.7 B is a sub-contractor of A. B takes out an insurance policy to cover his and A's liability to employees' compensation with an insurer (C), without joining A as a party. An employee of B is injured in the course of employment because of the negligence of A's employee. A pays the required compensation to B's employee. A, however, will have difficulties in seeking indemnity from C, since A is not a party to the insurance contract even though the parties intend to benefit him.

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