Indemnity Agreement

Saptaparni Raha
Sep 28, 2022
2 min read

Written by Saptaparni Raha, Lawyer

Introduction:

Indemnity is compensation that makes a person whole from a loss they have already sustained. The Indemnity Agreement protects the person who suffers loss and allows others to bear the cost associated with the damages.

Benefits of Having an Indemnity Agreement:

An indemnity agreement helps to protect the party from indemnification from lawsuits, damages, and claims from third parties.

Essential Clauses for the Agreement:

There must be a clause related to governing law and jurisdiction which will mention the name of the state whose law will be followed.
In the Indemnification Clause, the acts to be indemnified against should be specified.
In the Scope of the Coverage Clause, the agreement should state the extent of protection the indemnitee can claim under the transaction.
In the Indemnity Exception Clause, the agreement should specify any condition under which indemnity will not be protected by the Indemnitor.
In the Notice and Defense of a Claim Clause, the agreement should provide that the indemnitee will give the Indemnitor notice of a claim dispute covered under the agreement.
The Statement and the Consent Clause provides that the parties will get each other's consent before engaging in settling an action.
The Enforcement Clause should mention the way of enforcing the agreement.
The agreement should mention the duration of how much time the rights and obligations between the parties will exist.

Conclusion:

When parties enter into the contract, one party could be held liable for losses or damages from their activities. The Indemnity Agreement protects the party that might be liable, holding the party harmless from that liability.

References:

Ironclad. What is an Indemnity Agreement. retrieved from What Is an Indemnity Agreement? | Ironclad (ironcladapp.com)
Jean Muray. (2021). What is an Indemnity Agreement. retrieved from What Is an Indemnity Agreement? (thebalancesmb.com)