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What are the risks of an indemnity clause?

Indemnifications, or hold harmless provisions, shift risks or potential costs from one party to another. One party to the contract promises to defend and pay costs and expenses of the other if specific circumstances arise (often a claim or dispute with a third party to the contract).

What is the standard indemnity wording?

Company agrees to protect, defend, [hold harmless,] and indemnify (collectively Indemnify and Indemnification) [ABC], its subsidiaries, and its and their respective successors, assigns, directors, officers, employees, agents, [stockholders (in the case of a privately held company),] and affiliates (collectively,

Should I agree to an indemnity?

Indemnity clauses can include hold harmless wording under which one party agrees that the other will not be liable for any losses that the first party suffers arising from the specified events. It is always advisable that you seek independent legal advice on all contracts from a contract solicitor.

Is an indemnification clause necessary?

They are an essential risk allocation tool between the parties, and as such, they are one of the most commonly and heavily negotiated provisions in a contract.

What does agreement to indemnify mean?

An indemnity agreement is a contract that protects one party of a transaction from the risks or liabilities created by the other party of the transaction. Hold harmless agreement, no-fault agreement, release of liability, or waiver of liability are other terms for an indemnity agreement.

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