An indemnification agreement, also called an indemnity agreement, hold harmless agreement, waiver of liability, or release of liability, is a contract that provides a business or a company with protection against damages, loss, or other burdens. This type of contract allows businesses to carry out their services and/or provide products without the risk of being held responsible for problems in the future.
An indemnification agreement provides additional protection for businesses by ensuring that they are not held liable for damages or losses that occur outside of their control. This agreement allows the company to continue its operations while protecting against lawsuits. An indemnification agreement could also be a clause in a longer contract rather than a separate contract.
Here is an article about what indemnity means.
This legal document will hold harmless the initial party, the business or company and ensure that they are able to continue its operations and continue providing high quality products and services to its customers. With an indemnification clause or agreement, the business does not have to worry about loss or damages that occur to a third party outside of their own control.
The benefits related to the indemnity agreement include a lack of reason requirement for an indemnified party to prove causation, loss mitigation for the indemnified party, and a decreased level of risk associated with the contractual obligations and supplying of goods or services by the indemnified party.
Here is an article about the purpose of an indemnification agreement.
Frequently, an indemnification agreement will be created in an insurance agreement between two parties. This could exist in any form of insurance including motor vehicle insurance, health insurance, life insurance, homeowners’ insurance, malpractice insurance, and others.
They are also frequently used in fields such as construction, where the indemnification agreement may protect a contractor or builder who uses specific materials with the purpose of providing specified protection for the property. These agreements or clauses can be found in or used with a construction contract .
Other examples could include waivers of liability from ‘risky’ experiences or businesses, such as amusement parks, gyms, skating rinks, and ski slopes. These types of businesses may also ask their clients to sign liability waivers .
Indemnification agreements can exist in other forms, however, and may be included provisions in many contracts made between two parties. It then covers nearly any loss potentially suffered by the company including court costs, fees, and any settlements reached.