This form provides boilerplate contract clauses that restrict or limit the dollar exposure of any indemnity under the contract agreement. Several different language options are included to suit individual needs and circumstances.
New Hampshire Indemnity Provisions — Dollar Exposure of the Indemnity regarding Baskets, Caps, and Ceilings serve as crucial areas of consideration when drafting indemnity agreements. These provisions determine the possible financial risks associated with indemnification and help both parties navigate potential losses. Here, we will delve into the various types of indemnity provisions related to Baskets, Caps, and Ceilings in New Hampshire. 1. Baskets: In the context of indemnity provisions, a Basket establishes a threshold below which the indemnifying party is not required to reimburse the indemnified party. This means that the indemnifying party's financial responsibility is triggered only if the indemnified party incurs losses or damages above the specified Basket amount. Baskets can be further categorized into: — Deductible Baskets: These Baskets require the losses to exceed a certain deductible limit before the indemnifying party becomes liable for reimbursement. The deductible amount must be surpassed to trigger indemnification. — Standard Baskets: These Baskets set a threshold above which the indemnifying party becomes obligated to indemnify the indemnified party. Once the specified amount is exceeded, the indemnifying party must cover the losses. 2. Caps: Caps function as an upper limit or maximum liability that the indemnifying party can be held responsible for. When a cap is reached, the indemnifying party is not required to reimburse any further losses, even if the actual damages exceed the capped amount. Caps can be classified into: — Aggregate Caps: These establish a maximum combined amount that the indemnifying party can be liable for over multiple claims or losses during the indemnification period. Once this overall cap has been exhausted, the indemnifying party is not obligated to provide further indemnity. — Individual Caps: These refer to specific limits set for each claim or loss incurred. Each individual claim has its own maximum value, and once the cap is surpassed, the indemnifying party is released from further liability for that particular claim. 3. Ceilings: Ceilings, also known as thresholds, operate as a mechanism limiting the indemnifying party's exposure to indemnify for certain types of losses or claims. When the ceiling amount is reached, the indemnifying party is only required to indemnify the indemnified party up to that limit. If the losses exceed this ceiling, the indemnifying party does not have to reimburse for the excess. Ceilings in indemnity provisions can include: — Time-Based Ceilings: These specify the maximum liability within a certain time frame. Once the cumulative losses or claims surpass the time-based ceiling, the indemnifying party is no longer obligated to indemnify the indemnified party for losses occurring after the specified time duration. — Category-Based Ceilings: These set thresholds based on the nature or type of loss. For example, a category-based ceiling may establish a maximum indemnity amount for property damage claims or legal expenses. Once the ceiling amount for a specific category is reached, the indemnifying party is no longer required to provide reimbursement for losses falling under that category. Understanding the different types of New Hampshire Indemnity Provisions — Dollar Exposure of the Indemnity regarding Baskets, Caps, and Ceilings is crucial for both parties involved to ensure effective risk allocation and protection. It is advised to work with legal professionals when drafting or negotiating indemnity agreements to ensure clarity and fairness for both parties.
