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In this tutorial, Kevin O'Flaherty from O'Flaherty Law explains indemnification clauses, which can be standalone agreements or part of larger contracts. These clauses are used to transfer liability risk from one party to another. By agreeing to indemnify, one party commits to reimburse the other for monetary losses caused by specific actions. A common example given is in independent contractor agreements, where the contractor agrees to indemnify the hiring business if legal actions arise from their work. This protects the business from potential lawsuits linked to the contractor’s activities.