Indemnity Agreement

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Free Indemnity Agreement Template

Document and article reviewed by Mark Costello on November 13, 2023 Written by Easy Legal Docs Editorial Team

Discover the essentials of indemnity agreements with our straightforward guide, complete with a downloadable template to help you get started. This resource is designed to simplify the process and clarify the importance of these agreements in protecting your interests.

What is an Indemnity Agreement?

An indemnity agreement is a contractual promise by one party, known as the indemnifier, to compensate the other, the indemnitee, for certain losses or damages. This kind of agreement is commonly encountered in business deals where there is a potential for unexpected losses.

The Basic Structure

Here’s what a typical indemnity agreement includes:

• The Parties Involved: Identification of both the indemnifier and the indemnitee is crucial.
• The Scope of Indemnity: This part outlines the types of claims or losses covered and, importantly, any exclusions.
• Limitations: It’s common to limit the amount that one party can be obligated to pay.
• Claims Process: The agreement details how and when the indemnitee can make a claim and how the indemnifier will respond.

When Do You Need One?

Consider an indemnity agreement in the following situations:

1. You’re entering a business deal where you might face risks outside your control.
2. You’re a professional offering advice or services that could lead to liability.
3. You’re using property or equipment that belongs to someone else.

Identifying the Need

An indemnity agreement is crucial when entering situations with financial risk, such as leasing equipment or providing professional services.

Benefits of Indemnity Agreements

The advantages of having an indemnity agreement are:

• Risk Management: These agreements allocate risks to the parties best able to manage them, usually in return for a fee.
• Financial Security: Indemnitees know they have protection against certain types of losses.
• Legal Clarity: The terms of the agreement aim to prevent disputes by setting clear expectations for liability.

Key Considerations for Your Agreement

When drafting an indemnity agreement, keep in mind:

• Governing Law: Choose which jurisdiction’s laws will govern the agreement. This choice can significantly impact how the agreement is interpreted and enforced.
• Duration: Define how long the indemnity is in effect. It could be tied to a project’s lifecycle, a specific time frame, or an ongoing obligation.
• Insurance: Verify that the indemnifier has sufficient insurance coverage to back the indemnity promise.

How to Fill Out the Free Indemnity Agreement Template

Step 1: Date and Party Information

Start by entering the current date as the [DATE OF AGREEMENT] . This marks when the agreement is made. For example, if today’s date is November 7, 2023, you would enter “November 7, 2023”. Next, fill in the [INDEMNIFIER NAME] and [INDEMNIFIER ADDRESS] with the name and address of the party who will provide the indemnity. Repeat this step for the [INDEMNITEE NAME] and [INDEMNITEE ADDRESS] , detailing the information of the party who is protected by the indemnity.

Step 2: Description of Activity or Transaction

In the section that reads [DESCRIBE ACTIVITY OR TRANSACTION] , provide a clear and concise description of the activity or transaction that the indemnity agreement is covering. This should be a factual description of the services or actions that could potentially lead to a loss or a claim.

Step 3: Indemnity Clause

Review the indemnity clause as it is typically a standard provision. Understand that by signing, the Indemnifier will be agreeing to protect the Indemnitee against certain claims as outlined in the agreement.

Step 4: Scope and Limitations

Identify the boundaries of the indemnity including any limitations on the amount for which the indemnifier is liable by filling in the [MAXIMUM SUM OF CLAIM] . This amount should reflect the agreed-upon limit of indemnification.

Step 5: Notice of Claim

Specify the number of days within which a claim must be reported by entering the appropriate number in [NUMBER OF DAYS] . This time frame should be reasonable and allow sufficient time for the Indemnitee to notify the Indemnifier of any claims.

Step 6: Insurance Requirements

In the section for [MINIMUM INSURANCE COVERAGE AMOUNT] , enter the minimum amount of insurance the Indemnifier is required to maintain. This amount should correspond to the potential risks associated with the activity or transaction described.

Step 7: Duration and Termination

Specify when the indemnity coverage starts by reiterating the [DATE OF AGREEMENT] and determine the [END DATE OR EVENT] when the agreement will end or the conditions under which it can be terminated.

Step 8: Governing Law

Choose the appropriate [GOVERNING LAW] that will govern the agreement. This should be a jurisdiction that is relevant to either the Indemnifier or the Indemnitee, or it could be based on where the activity or transaction takes place.

Step 9: Execution of the Agreement

Once all fields are completed and both parties agree to the terms, both the Indemnifier and the Indemnitee should sign and print their names and date their signatures to execute the agreement. Ensure that all parties have a copy of the signed document for their records.

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