Professional Indemnity Fractal What is a Collateral Warranty?

Collateral warranty is a term to describe an additional contract, usually connecting a contractor or subcontractor with another interested third party.

The purpose of the collateral warranty is to provide additional security for other parties involved in a construction project, but who are not directly linked to the parties delivering it. The warranty gives the third party the right to sue the warrantor.

Collateral warranties can have significant implications for the coverage provided by professional indemnity insurance policies. 

We have a helpful guide that you can read on this subject: Guide To Collateral Warranties (and Professional Indemnity)

For more information or a discussion with one of our experts, please call 0345 251 4000.