What does it mean to indemnify against loss?
Legal Definition of indemnify 1 : to secure against hurt, loss, or damage. 2 : to compensate or reimburse for incurred hurt, loss, or damage. Other Words from indemnify. indemnifier noun.
Can you indemnify against death?
So for example each party will indemnify the other against claims in respect of any: death of, or personal injury to, the party’s own employees; A carefully negotiated and drafted indemnity clause is crucial to ensuring that risk is appropriately allocated.
What is indemnification for loss?
Indemnity is a comprehensive form of insurance compensation for damages or loss. In this type of arrangement, one party agrees to pay for potential losses or damages caused by another party.
What does indemnification protect against?
The primary benefit of an indemnification provision is to protect the indemnified party against losses from third party claims related to the contract. They are typically used in agreements where the risks associated with a party’s non-performance, breach, or misconduct are high.
Why is an indemnification clause important?
The most important part of an indemnification clause is that it protects the indemnified party from lawsuits filed by third parties. This protection is important because damaged parties are still able to pursue compensation for their losses even if this clause isn’t in the contract.
Do you have to prove loss for an indemnity?
An indemnity will typically be triggered by losses being incurred, without the need to prove any “fault”. This can also avoid rules around causation and mitigation, which can otherwise make recovery more problematic.
Can you indemnify a third party?
Indemnification is the practice of guaranteeing a third party claim against your counterparty. Both you and the vendor have financial liability in some proportion as a result, however your contract required the staffing agency to indemnify you for any third party claims that arose in the performance of the contract.
What are the rights of indemnity holder?
In a contract of indemnity the indemnity holder is entitled to recover from the promise and indemnifier all damages for which he may be compelled to pay in any suit as of any matter to which the promise the indemnity applies while acting within the scope of his authority.
What is defend indemnification?
The term defend, on the other hand, usually imposes an independent duty to either actively defend or fund the defense of any claim brought against the indemnitee that falls within the scope of the indemnification provision.
What does an indemnity clause do?
What Is an Indemnity? An indemnity in a contract is a promise by one party to compensate the other party for loss or damage suffered by the other party during contract performance. An indemnity is also known as a ‘hold harmless’ clause as one party agrees to hold the other party harmless.
Which is an example of indemnification for loss?
Indemnity is based on a contractual agreement in which one party agrees to pay for any damages or losses that are caused to another party. For example, in an insurance contract, one party agrees to pay the other party for losses or damages in return for a premium payment that is paid to the insurer.
What happens when you indemnify a second party?
By indemnifying the second party, the first party, in effect, agrees to pay for or make good any loss or damages that may occur. In other words, by agreeing to make the indemnitee (the party that receives, or benefits from, the indemnity) NOT liable, the indemnitor (the party granting the indemnity) effectively agrees that he/she IS liable.
How is indemnification similar to a liability waiver?
Indemnification is a legal agreement by one party to hold another party blameless – not liable – for potential losses or damages. It is similar to a liability waiver but is usually more specific, applicable only to particular items, circumstances, or situations, or in regard to a particular contract
Why is indemnification important in a legal agreement?
Why Indemnification is Important. Indemnification can be important to both parties entering into a transaction or contractual agreement. If you are granting the indemnity, the provision of reasonable protection against liability may be essential to you being able to do business with the other party.