Indemnification clause
A promise that if someone else sues them over something you did, you pay: the damages, the settlement, and usually their legal bills too.
See it
What it is
Indemnity moves risk from one side of a contract to the other, most often risk arriving from outside. Three verbs are conventionally read as doing different jobs: defend means you hire and pay the lawyers from the first letter, indemnify means you cover the judgment or settlement, and hold harmless means you cannot later claim the cost back off them. How much daylight actually sits between those three depends on the drafting and the governing law, so spell out what each one obliges rather than trusting the words to carry it. 'Third party' is the usual scope, and it is a drafting choice rather than a rule: indemnities are regularly written to cover first-party losses too, like a client's own breach-response costs after an incident you caused. A client suing you over a bad build is ordinarily breach of contract, handled by the liability cap. A photographer suing your client over a stock image you licensed wrong is ordinarily indemnity.
In a normal services contract the indemnity runs both ways: you cover IP infringement claims arising from work you created and your own negligence, the client covers content and materials they handed you and how they use the deliverable after launch. SaaS terms add a customer indemnity for user content and misuse of the product.
Gotchas: indemnity is often written outside the limitation of liability cap, so an uncapped one silently undoes the cap you just negotiated. The duty to defend triggers on an allegation, not a finding, so you can be funding counsel for a claim you eventually win. And check your insurance actually covers liability you assumed by contract, because plenty of policies exclude exactly that.
Ask AI for it
Draft a mutual indemnification clause for a services agreement between [provider] and [client]. Spell out the duties to defend, indemnify and hold harmless as three separate obligations, defining what each one actually requires rather than relying on the words alone, since their effect varies by drafting and governing law. State whether the indemnity is limited to third-party claims or also reaches the other party's own direct losses, and say which you have drafted. Provider indemnifies for third-party intellectual property infringement claims arising from deliverables it created and for its own gross negligence or willful misconduct; client indemnifies for materials, content and data it supplies and for its use of the deliverables after delivery. Include a claims procedure: prompt written notice, control of the defense by the indemnifying party, reasonable cooperation, and no settlement admitting fault or imposing obligations without the other party's consent. State explicitly whether this indemnity is subject to the limitation of liability cap, and if so, name the cap. Plain English, no defined terms that are not defined in the clause itself.