Indemnity Agreement Template
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FAQ
A typical indemnification clause consists of two separate and distinct obligations: an obligation to indemnify, and an obligation to defend.
There are 3 levels of indemnification: broad form, intermediate form, and limited form. This requires the indemnitor to pay not only for its liabilities but also for the indemnitee's liability whether the indemnitee is solely (i.e. 100%) at fault or partially at fault.
How to Write an Indemnity Agreement Consider the Indemnity Laws in Your Area.Draft the Indemnification Clause.Outline the Indemnification Period and Scope of Coverage.State the Indemnification Exceptions.Specify How the Indemnitee Notifies the Indemnitor About Claims.Write the Settlement and Consent Clause.
Although similar to a hold harmless agreement, an indemnity agreement is an arrangement whereby one party agrees to pay the other party for any damages regardless of who is at fault.
Often a letter of indemnity is written by a third party, often a bank or insurance company.
Insurance policies are a common example of one party indemnifying another. When you purchase an insurance policy, the company essentially agrees to indemnify the policy holder, or another party, against any damages that may occur.
For example, in the case of home insurance, the homeowner pays insurance premiums to the insurance company in exchange for the assurance that the homeowner will be indemnified if the house sustains damage from fire, natural disasters, or other perils specified in the insurance agreement.
The best example of indemnity would be insurance indemnification. Let's say the commercial property owner has consistently paid insurance premiums for the property. The money is paid to an insurance company that promises to take full responsibility for repaying any losses if any loss or damages ever occurs.