How to Review Net-of-Insurance and No-Double-Recovery Wording

Friday 9 October 2026 is the signature date. Mabli reviews a 15-person UK brand of copper cake tins. The tins leave a Swansea workshop. English law. Courts of England and Wales.

The packet — the papers you will actually sign — is a supply agreement with Hafod Pack Ltd in Birmingham.

The hidden risk sits in one indemnity sentence. Slack wants the whole retailer debit, and wants the policy left alone.

For example, clause 11 indemnifies the buyer for defective goods and for third-party claims. Clause 11.4 is the netting line.

It says losses are net of insurance proceeds paid or payable. It says the buyer shall exhaust the policy before any claim. It says the buyer bears the premium and the excess. It says later insurance is repaid in full.

An Exeter retailer sent a debit note on 18 September 2026. The note is about £7,150 for dented tins. That note is not a court finding.

The certificate shows an excess of £750 on this policy. That figure is this certificate. It is not a market excess. The insurer has not paid. Mabli has not notified the policy.

Slack on 1 October wants both cheques. The pressure is to call this set-off, or to say the insurance schedule already did the job. That is the typical mistake.

In practice one published sample cuts the indemnity by proceeds that are only payable. Another cuts only money actually recovered, and says the claim shall not delay payment. Do not treat either sample as the norm.

Disclaimer: Checkory provides AI support, not legal advice. Consult a qualified lawyer for binding decisions.

What does net of insurance actually subtract?

Subtract only money that has arrived. Do not subtract a policy that merely exists. Do not guess a future cheque.

Clause 11.4 says paid or payable. Payable is a hope. Received is cash in the account. They are not the same cut.

One no-double-recovery sample makes the indemnity net of proceeds paid or payable. It asks for reasonable efforts to collect. A later receipt comes back less costs, expenses, or premiums incurred directly.

A net-of-proceeds sample reduces the payment only by proceeds actually recovered. A later cheque comes back as the overlap, not as a second profit.

A third-party proceeds sample counts any third-party amount actually recovered, including insurance, net of collection cost, a premium adjustment, and tax on that receipt.

Brett LJ, in Castellain v Preston, as set out on this indemnity extract, said a marine or fire policy is indemnity only. The assured is fully indemnified, and never more than fully indemnified.

How do you review a duty to claim the policy?

Read the verb before you decide to wait. Exhaust is a condition. Reasonable efforts are a pursuit. Do not merge them.

Clause 11.4 says the buyer shall exhaust the policy before any claim. Exhaust means Hafod's cheque waits. That is a pause, not a reason to hide the notice.

The net-of-proceeds sample uses commercially reasonable efforts. It then says the existence of an insurance claim shall not delay a payment that is otherwise due.

Slack says do not tell the insurer. A pursuit duty is a notice. A wait duty is a condition on the page. Silence is not permission to collect twice.

Which cheque is the premium and which is the excess?

The premium is the cost of buying the policy. The excess is the slice the policy does not pay. Clause 11.4 puts both on the buyer. Split them on the log.

Open the vendor insurance requirements checklist only if the fight is the certificate. Then come back to clause 11.4.

The £750 excess is printed on this certificate. It is not a standard excess. It is not Hafod's number unless the clause says the vendor bears it. This clause says the buyer bears it.

Edwin Coe, on 9 May 2024, sets out pay up and recover down from Napier and Ettrick. Uninsured loss, excluding the excess, comes first. Then the insurer. Then any remainder toward the excess.

Does a later insurance cheque come back in full?

Repay the overlap. Do not repay a different sum. Do not keep both. Clause 11.4 says repaid in full, and that phrase can overshoot.

The actually-recovered samples repay a gap. Ask what Hafod would have paid if the later money had arrived first. Return that gap. Stop at the sum Hafod actually paid.

In full can hand over the whole later cheque, even the excess slice. No later cheque has arrived. Do not invent one.

Carter Newell, on 14 June 2024, notes the Textainer appeal. A recovery should not leave the insured worse off than if the money had arrived before the policy paid.

A proceeds-and-other-amounts sample nets out-of-pocket collection cost. Collection cost is the cost of getting the cheque. It is not a second indemnity.

Should you review subrogation before you delete the net?

Netting is the arithmetic. Subrogation is who may sue next. Do not delete clause 11.4 because the word subrogation is missing.

After payment, the insurer may step into the insured's rights, only up to the sum it paid. One sample says that indemnity wording alone is not a windfall for the insurer.

Stewarts, on 28 May 2025, explains Watford and other-insurance clauses. Policies that each try to be excess-only can cancel. The insured may choose which policy to claim, and still cannot recover more than the loss.

That is double insurance between policies. Do not copy that note's limits. A sale basket is not this supply indemnity.

When to walk if the clause still says repaid in full?

Keep a received-only net, write the clawback, or walk. Pause if Friday needs paid or payable, exhaust, and repaid in full left as they stand.

Before you sign, say why both cheques is not the success bar. The £7,150 debit is not a finding. The £750 excess is this certificate only.

If Slack calls the clawback a short-pay of the next invoice, that is set-off. Use the payment set-off review for the invoice fight. This clause nets a recovery for the same loss.

Workflow: paid or payable → actually received → name the premium → name the excess → claw back the overlap → walk if Friday needs both cheques.

Escalate the certificate if the fight is whether cover exists. Verify that no insurer cheque has arrived. Do not trade this for a cap that is not in 11.4.

Upload the same file. Flags come back on that file. A human still fills the checklist. Not a chat. Not a word-processor add-on. Not a contract archive.

Sign when the net subtracts only money in hand. The clawback must not exceed the overlap. If the page still does the opposite, walk.