How To Draw Up an Indemnification Agreement

Standardized Legal Documents How To Draw Up an Indemnification Agreement

Find Out How an Indemnification Agreement Works

An indemnification agreement—also known as a hold harmless agreement—is one of the handiest legal documents you can make. Drawing up this contract is an easy job for a lawyer, but not for people who don’t know much about the law. 

Before you sign an indemnification agreement, you should learn its essentials, and this article will help you find out more about it. We will solve all your dilemmas about writing such a contract and show you how to create legal documents in no time with DoNotPay’s handy templates!

What Is an Indemnity Agreement, and Are There Any Subtypes?

Indemnity is a special regulation that guarantees one of the signing parties will be exempt from responsibility for any damage or loss. You can create a full contract based on indemnity or include it in any other agreement as a special clause.

Two parties should sign an indemnity agreement—an indemnifier who agrees to cover potential claims and an indemnitee who is free from any liabilities. 

This contract can have three forms, presented in the table below:

Agreement TypeDetails

Broad Form Indemnity Agreement

This type of contract obliges the indemnifier to accept responsibility and bear the consequences for damage that isn’t their fault in the name of the other party. They are also responsible for mistakes or losses caused by a third party

Limited Indemnity Agreement

If the parties sign a limited indemnity contract, the indemnitee must pay for any loss or damage they caused. It means that the indemnifier doesn’t have to accept the fault for the mistakes that the other party made. They are responsible for mistakes caused by a third party

Comparative Form Agreement

Such a document requires the faults of both parties to be compared. The entities need to rely on the local laws and regulations to determine the details of the contract

When Can You Use an Indemnity Agreement?

Indemnity agreements are common in the construction business, but they are applicable in many other fields that include high-risk contracts. Besides construction companies, the parties using them the most are:

  • Event fundraisers
  • Rental car companies
  • Landlords and tenants
  • Employers and employees
  • Companies offering extreme or dangerous activities, such as parasailing, amusement park activities, etc. and their customers
  • Pet kennel owners and clients
  • Surety bond companies and their clients

As a separate clause, indemnity is usually a part of:

  • Commercial contracts
  • Loan agreements
  • Intellectual property licensing agreements
  • Software licensing agreements
  • Share purchase agreements

What Should an Indemnity Agreement Cover?

The purpose of an indemnity agreement is to stipulate all liability regulations both parties need to stick to. For this document to be valid and effective, you must define the conditions in as many details as possible. By doing it, you will avoid disputes, misinterpretations, and stressful court proceedings if something goes wrong.

Here are the essential sections your indemnity agreement should contain:

  1. Names of the parties
  2. Definitions of the most important terms in the contract
  3. Amount of money securing the contract
  4. Thoroughly described terms of indemnitee protection
  5. List of potential losses the indemnitee could suffer
  6. Exclusion to the agreement
  7. Claim procedure description
  8. Signatures of both parties

Creating Legal Documents Is Much Easier With DoNotPay

If you don’t know much about the law and your local legislation, making a contract can turn into a tiresome and time-consuming procedure. You can easily find some samples and templates on various websites, but it’s hard to check their validity and be sure they contain all the necessary sections and clauses.

DoNotPay, an awarded virtual lawyer, enables you to create an unlimited number of various legal documents

To use our service, follow these steps:

  1. Sign in to DoNotPay in your preferred web browser
  2. Look for the specific document you want to generate
  3. Go through a brief questionnaire with our chatbot

We will use your answers to create a fully customized version of the desired document in less than five minutes! The only remaining step is to make your contract legally binding by notarizing or signing it with the other party, depending on the agreement type.

If you are interested in learning the ins and outs of room rental, subordination, commission, non-solicitation, asset purchase, or real estate purchase agreement, you can get more handy guides in our knowledge base!

DoNotPay Has Many Types of Contracts in Store

The good news is that our standardized legal document database gets richer every day. DoNotPay keeps introducing various templates, perfect for creating a great contract quickly and with no sweat! 

Here’s the list of the documents we offer:

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