It means one party agrees to cover the other’s losses or legal costs from certain claims. A broad indemnity clause can make you responsible for problems that aren’t your fault — read it carefully.
Indemnification is one of the most consequential clauses in any contract, and one of the most overlooked. It shifts risk: you agree to compensate the other party for specified losses, damages, or legal costs — often arising from claims related to your work or products. The danger is scope. A narrow, mutual indemnity (each covers losses they cause) is reasonable. A broad one-sided clause can obligate you to cover the other party’s costs even for things outside your control, including their own partial fault. Always check what triggers indemnity, whether it’s mutual, and whether there’s a cap on your exposure.
Not inherently — a mutual, narrow indemnity is normal. The risk is a broad, one-sided clause making you liable for losses beyond your control or fault.
Ideally yes — a mutual clause where each party covers losses they cause is fairer than one where only you indemnify the other side.
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