As a business owner, it’s crucial to protect yourself from potential legal issues that can arise from agreements with clients or partners. That’s where an indemnity clause comes in. This clause is a legal provision that shifts the risk of certain losses or damages from one party to another. Essentially, it’s a way to ensure that both parties are protected in case something goes wrong.

An indemnity clause can be included in any type of contract, from a simple service agreement to a complex commercial lease. The clause lays out the responsibilities and obligations of each party in the event of a breach of contract or other legal dispute. It’s important to have a clear and concise indemnity clause that is tailored to your specific business needs.

Here’s a sample indemnity clause that you can use as a starting point:

“[Party A] agrees to indemnify and hold harmless [Party B], its affiliates, officers, directors, employees, and agents, against any and all claims, damages, liabilities, costs, and expenses (including reasonable attorney’s fees) arising out of or in connection with any breach of this Agreement by [Party A].”

This clause places the responsibility of any damages or costs incurred as a result of a breach of contract on Party A. It also includes attorney’s fees, which can add up quickly in a legal dispute.

It’s important to note that there are different types of indemnity clauses. A “broad form” indemnity clause would require one party to indemnify the other for any and all losses, even if they were not caused by the indemnifying party. A “limited form” indemnity clause would only require one party to indemnify the other for losses caused by the indemnifying party. It’s important to work with a lawyer to ensure the indemnity clause in your contract is appropriate for your business needs.

In summary, an indemnity clause is a crucial aspect of any contract to ensure that both parties are protected in the event of a legal dispute. While using a sample indemnity clause can be helpful, it’s important to work with a lawyer to ensure the clause is tailored to your specific business needs and addresses all potential legal risks.