Contract Glossary
Indemnification
Definition
Indemnification is one party's promise to cover the other's losses if something specific goes wrong. It's the 'I'll pay for it if this blows up' clause.
In Practice
You hire a contractor to build your website, and they accidentally use a copyrighted image. The photographer sues you. An indemnification clause in your contractor agreement means the contractor pays for the lawsuit — not you. Watch the scope: some indemnification clauses are broad ('any and all claims'), and some are narrow ('claims arising from contractor's negligence'). Broad clauses shift more risk. If someone asks you to sign one, make sure you understand what you're covering. Also check whether the obligation is capped — unlimited indemnification exposure can be a serious financial risk for a small service provider.
Example Clause
The Service Provider shall indemnify, defend, and hold harmless the Client, its officers, directors, employees, and agents from and against any and all claims, damages, losses, liabilities, costs, and expenses (including reasonable attorney's fees) arising out of or related to the Service Provider's breach of this Agreement, negligence, or willful misconduct in the performance of Services.
Common in these contract types
Related contract clauses
Related articles
Indemnification Clause Explained
What is an indemnification clause and when should you push back? A plain-language guide with real examples for business owners and freelancers.
Retainer vs Project-Based Agreement
Compare retainer vs project-based service agreements — billing, scope, and termination differences. Create the right contract for your work.
How to Write a Service Agreement That Actually Protects You
Most service agreements protect the wrong things. Here is how to write one that covers the gaps that actually cause disputes.
Frequently asked questions about indemnification
Limitation of liability caps how much you can owe total. Indemnification is a promise to cover specific losses. They work together: you might have a $100,000 liability cap, but an indemnification obligation for IP infringement that sits outside that cap. Always check whether indemnification obligations are subject to the liability cap or carved out from it.
Create a contract with proper indemnification clauses
Generate a professional contract in minutes with all the essential clauses — no legal expertise needed.
Create your contractThis content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.