ITIC Warns of Confidentiality Agreement Traps
UK-based indemnity insurer ITIC has advised shipbrokers, consultants and other advisers not to sign confidentiality agreements which restrict their ability to do business.
According to ITIC, the use of such agreements has always been common when parties are considering doing business but need to provide information to the other party before they enter into a formal contract.
“In these circumstances, the party providing the information will protect its interests by insisting that the receiving party signs a stand-alone confidentiality agreement,” ITIC said.
” Historically, this has been associated with transactions such as the sale of corporations but, more and more, ITIC is seeing it in a wide range of circumstances involving its members.”
However, ITIC added that consultants and other advisers needing access to information to enable them to provide their services are frequently asked to sign confidentiality agreements.
“Increasingly, too, shipbrokers providing valuation services receive the same request. The important thing is to ensure that the wording of the agreement does not unnecessarily restrict the member’s ability to do business with other clients.”