Indemnification explained
Don't sign blind.
An indemnification clause requires one party to defend the other and pay legal costs and losses arising from specified events. The negotiation is around scope, mutuality, and carve-outs.
No account requiredFile deleted after analysisNot legal advice
What it usually means
Indemnification means one party agrees to defend the other and cover specified losses. "Indemnify, defend, and hold harmless" is the common formula. Scope can be broad (any claim arising from the relationship) or narrow (specific risks like IP infringement).
Why it matters before signing
Broad one-sided indemnification can quietly expose you to costs far above the contract value, including legal fees and third-party damages. Mutual carve-outs (gross negligence, willful misconduct, IP infringement) and dollar caps are negotiable.
What to ask before signing
- Is indemnification mutual, or one-sided?
- What is the scope: any claim arising from the relationship, or named risks only?
- Are there caps, carve-outs, or insurance requirements?
How Dang catches it
Dang flags broad indemnification language across vendor, employment, freelance, and commercial-lease engines. One-sided indemnification gets a separate flag in freelance contracts.
Frequently asked questions
What's the difference between "indemnify" and "defend"?
"Indemnify" means cover losses after the fact. "Defend" means pay legal costs as they're incurred. Both usually appear together.
What's a reasonable indemnification scope?
Mutual indemnification for IP infringement and confidentiality breach is common. Broad "any claim arising from" language without carve-outs is aggressive.
Do liability caps apply to indemnification?
Sometimes. Many contracts carve indemnification out of the liability cap, leaving exposure unbounded. Worth pushing for an indemnification cap or for indemnification to fall under the general cap.
Sources & further reading
No account required · File deleted after analysis · Not legal advice. Dang reports contract findings in plain English. For consequential decisions, consult a licensed attorney in your state.