Governing law and jurisdiction clauses specify which country’s or state’s laws govern an engineering contract and where disputes can be heard.
This can affect Professional Indemnity Insurance.
Policies may contain territorial limits and jurisdictional limits that restrict where work can be performed or where claims can be brought.
For example, an Australian engineering firm may work for an overseas client while physically remaining in Australia. The contract might still specify that disputes are governed by the laws of another country.
Engineers should check:
- where the client is located
- where the project is located
- which law governs the contract
- where legal proceedings can be brought
- whether the PI policy covers that jurisdiction
Contracts involving the USA or Canada can require particular attention because some insurers restrict or exclude those jurisdictions.
