The Clause Files: Indemnification

A series breaking down common contract clauses and explaining why they’re included. After all, your contract clarity is out there.

Indeminification. Client shall indemnify, defend, and hold harmless Company, along with Company's affiliates and their respective officers, directors, employees, and agents, against all damages, claims, liabilities, losses, and other expenses, including without limitation attorneys' fees and related costs, whether or not a lawsuit or other proceeding is filed….

The indemnification clause is the part of a contract that allocates the risk and expense. It can be either unilateral or bilateral (mutual indemnification). Mutual indemnification requires each party to a contract to compensate the other party for losses and expenses arising out of events caused by the indemnifying party’s breach, default, or misconduct. Whereas unilateral indemnification requires only one of the parties to provide this protection to the other party. This clause is typically heavily negotiated. The choices are not just whether the clause is unilateral or bilateral but can include which types of liabilities will be covered by the indemnity and which ones will be expressly excluded. It should always be tailored to the specific circumstances.

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