Indemnification
Indemnification is a contractual obligation where one party agrees to compensate another for losses, damages, or liabilities arising from specific events or actions.
How It Works in Contracts
An indemnification clause allocates risk between parties. The indemnifying party agrees to cover costs if certain events occur, such as breach of contract, IP infringement, or third-party claims. Indemnification can be mutual or one-directional.
Examples
- A vendor indemnifies a client against claims from defective products
- A SaaS provider indemnifies customers against IP infringement claims
- A contractor indemnifies a company against negligence injuries
