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A limitation of liability clause is a provision in a contract that limits the amount of exposure a company faces in the event a lawsuit is filed or another claim is made. If found to be enforceable, a limitation of liability clause can cap the amount of potential damages to which a company is exposed. The limit may apply to all claims arising during the course of the contract, or it may apply only to certain types of causes of action.
Increasing the Limitation of Liability. Typically, the limitation of liability clause affords the customer the option of increasing the standard limit by agreeing to pay an additional periodic fee to the alarm dealer.