Generate indemnification clauses
AI writes mutual or one-way indemnification provisions for contracts. Get professional liability protection instantly.
Generate indemnification clauses
River's Indemnification Clause Generator creates comprehensive indemnity provisions for contracts. Indemnification clauses allocate risk by requiring one party to cover the other party's losses from specified claims (intellectual property infringement, breaches, third-party lawsuits). You specify whether indemnification is mutual or one-way, which claims are covered, defense obligations, and caps. The AI generates professional indemnification provisions with standard legal language. Perfect for all contract drafters managing liability allocation.
Unlike simple hold harmless language, comprehensive indemnification clauses specify which claims trigger indemnity, defense and settlement control procedures, notice requirements, cooperation obligations, and limitations on indemnity. The AI creates provisions that balance protection with commercial reasonableness. You get enforceable clauses that clearly allocate third-party claim risks between contracting parties.
This tool is perfect for all contract drafters, corporate counsel negotiating liability terms, attorneys creating services agreements, and anyone managing contractual risk. Use indemnification clauses in services agreements, vendor contracts, technology agreements, partnership deals, and any contract with third-party liability risk. Great for creating standard provisions across contract templates. The AI generates foundation clauses attorneys customize for specific deals.
Understanding Indemnification
Indemnification shifts liability from one party to another for specified claims. If a third party sues Party B for something Party A did, an indemnification provision might require Party A to defend the lawsuit and pay any damages. This protects Party B from bearing costs of Party A's actions. Common indemnification scenarios include intellectual property infringement (vendor indemnifies customer against claims that vendor's product infringes someone's patent), bodily injury (contractor indemnifies property owner for injuries contractor causes), and breach of obligations (service provider indemnifies client for losses from provider's failures).
Indemnification typically includes four components: indemnity (reimbursement for losses), defense (conducting legal defense of claims), settlement control (who decides whether to settle), and cooperation (assistance during defense). Strong indemnification provisions require the indemnifying party to defend claims at their expense, give them control over defense and settlement decisions, require prompt notice of claims, and obligate the indemnified party to cooperate. These procedures prevent indemnified parties from settling cases for inflated amounts at the indemnifying party's expense.
Distinguish between mutual and one-way indemnification. One-way indemnification means only one party indemnifies the other (common in customer contracts where vendors indemnify customers but not vice versa). Mutual indemnification means each party indemnifies the other for different claims (e.g., each party indemnifies the other for their own breaches, IP infringement, and third-party claims arising from their conduct). Mutual indemnification is more balanced and common in commercial contracts between sophisticated parties. However, many companies try to get one-way indemnification where they're indemnified but don't give indemnity in return.
What You Get
Complete indemnification provision
Mutual or one-way indemnity as specified
Defense obligations and settlement control
Notice and cooperation requirements
Professional, enforceable language
How It Works
- 1Specify indemnity termsEnter mutual or one-way, covered claims, defense obligations, and caps
- 2AI generates clauseOur AI creates comprehensive indemnification provision in seconds
- 3Review and adjustRefine for specific risk allocation and negotiated terms
- 4Insert into contractAdd clause to agreement's liability provisions
Frequently Asked Questions
What's the difference between indemnification and limitation of liability?
They serve different purposes. Limitation of liability caps one party's direct liability to the other party for breaches of the contract. Indemnification addresses liability to third parties. If Party A breaches and causes Party B direct losses, limitation of liability caps those losses. If Party A's breach causes a third party to sue Party B, indemnification requires Party A to cover Party B's costs of defending and resolving that third-party claim. Both clauses are important risk management tools addressing different scenarios.
Should indemnification obligations be capped?
It depends on the risks and negotiating leverage. Uncapped indemnification exposes the indemnifying party to potentially unlimited liability for third-party claims. Some companies cap indemnification at amounts paid under the contract or at specified dollar amounts. However, customers often resist indemnity caps for critical risks like IP infringement, arguing that if a vendor's product infringes patents, the vendor should cover all resulting costs regardless of contract value. Indemnification caps are negotiated based on the risks, insurance coverage, and relative bargaining power.
Who controls defense and settlement of indemnified claims?
Typically, the indemnifying party controls defense and settlement since they're paying. However, indemnified parties often negotiate consent rights over settlements that impose obligations on them (admission of liability, injunctions, etc.) or defense strategies that could affect them. Well-drafted indemnification provisions specify: indemnifying party controls and funds defense, indemnifying party can settle without consent unless settlement imposes obligations on indemnified party, indemnified party must cooperate in defense, and indemnified party can participate in defense at their own expense.
What if both parties are at fault for a claim?
Indemnification provisions should address comparative fault. If both parties contributed to a third-party claim (e.g., product defect was partly vendor's fault and partly customer's modifications), indemnity might be allocated proportionally. Some indemnification provisions include carve-outs: Party A indemnifies Party B except to the extent the claim resulted from Party B's actions. This prevents Party B from getting indemnity for its own misconduct. Address fault allocation explicitly to avoid disputes when claims have mixed causation.
How does insurance interact with indemnification?
Indemnification obligations should be insured, but insurance doesn't eliminate the obligation. If Party A indemnifies Party B and Party A has liability insurance, the insurance might cover the claim. However, Party A remains contractually obligated to indemnify even if insurance doesn't cover it (e.g., because of exclusions, limits, or denial). Some contracts require parties to maintain specified insurance and name the other party as additional insured. This gives the indemnified party direct rights against insurers but doesn't replace indemnification obligations.
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