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As a service provider, I've been requested to sign an End-User licence agreement for the user to use my service. The contracts looks correct except that part that I'm not sure:


INSURANCE: You will, at your own cost and expense, obtain and maintain in full force and effect, with financially sound and reputable insurers having A.M. Best ratings of at least A- (VII) or better, insurance necessary to cover Your obligations under this Agreement, including coverage for any infringement claims related to the Software or use thereof. For all coverages maintained by You, the policy territory must satisfy the jurisdictions where this Agreement is governed. Immediately upon [REDACTED]’s request, You will supply a Certificate of Insurance evidencing the policies You maintain, the limits maintained for each coverage, and applicable insurance company(ies).


I have some insurance but I don't think it matches the one requested here. Moreover, this one mentions a "best ratings of at least A- (VII) or better" which I don't know what it is. Living outside of the US (this client is US), I'm not sure I can comply with this line.

What do I need to do?

Thank you.

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What do I need to do?

You should explain the counterparty why the terms of the clause are impractical (or perhaps unduly burdening), and propose amendments thereto.

In every contract to which you are a party, you need to ensure that its terms are clear to you. Never be shy to ask for clarifications and have them reflected in the binding contract. That is because your acceptance of a contract conveys that you fully knew and understood your rights and duties under that agreement.

this one mentions a "best ratings of at least A- (VII) or better" which I don't know what it is

A.M. Best is a rating agency that supposedly assesses the financial health of insurance companies.

Your insurer might or might not to be tracked by that rating agency, whence it is possible that your policy(-ies) with that insurer would not be deemed compliant with the clause.

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