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Tyson Law Blog

You should have access to practical, straightforward legal guides on the topics that interest you. That’s why the Tyson Law Blog is updated with regular posts on topics geared toward the Seattle business community.

Common Contract Clauses: Indemnification

Indemnification clause

An indemnification clause in a contract represents an agreement by one party to compensate the other party for certain costs and expenses.

While the details of these clauses are highly variable, the basic idea is usually that the indemnifying party agrees to reimburse the indemnified party for any recoverable damages that arise from certain covered events. Examples of covered events include lawsuits, government actions, and other claims by third parties.

As part of an indemnity clause, it’s common to see an obligation for the indemnifying party to also defend the indemnified party against claims by a third-party or to pay for the defense of a claim or litigation. This can be a particularly important protection for a party that lacks the resources to defend itself against a lawsuit.

Note: The quintessential example of contractual indemnity is an insurance policy: the insurer agrees to reimburse the policyholder for damages caused by certain events.

Other Common Contract Clauses