What is Indemnification?
Quick answer
An indemnification clause shifts liability — one party agrees to cover losses, damages, or legal fees the other party incurs from specified events.
An indemnification clause shifts liability — one party agrees to cover losses, damages, or legal fees the other party incurs from specified events. They are one of the highest-dollar clauses in any contract.
Examples
- A vendor indemnifies a customer against IP infringement claims arising from the vendor's product.
- A contractor indemnifies the owner against injury claims on the jobsite.
- A mutual indemnification where each party covers losses caused by their own breach.
Why this matters
BeforeSigning flags one-sided indemnities, uncapped exposure, and duty-to-defend language that can bankrupt a small company.
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Frequently asked questions
What is Indemnification?
An indemnification clause shifts liability — one party agrees to cover losses, damages, or legal fees the other party incurs from specified events. They are one of the highest-dollar clauses in any contract.
When does Indemnification matter?
BeforeSigning flags one-sided indemnities, uncapped exposure, and duty-to-defend language that can bankrupt a small company.
What's an example of Indemnification?
A vendor indemnifies a customer against IP infringement claims arising from the vendor's product. A contractor indemnifies the owner against injury claims on the jobsite. A mutual indemnification where each party covers losses caused by their own breach.
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