What Is an Indemnity?

A contractual arrangement concerning responsibility for specified losses, liabilities or claims.

What Does Indemnity Mean?

An indemnity is a promise in a contract that one party will bear responsibility for certain specified losses, liabilities or claims. The scope depends entirely on how the clause is drafted.

Why It Matters

Indemnity clauses are common in commercial agreements and can carry significant financial consequences. They should be read carefully, along with the rest of the contract, before being accepted.

Related Information

Related legal terms: Contract, Confidentiality, Liquidated Damages

Related practice area: Corporate & Commercial Law →

Dealing With a Related Matter?

This explanation is a general starting point. If the term matters in a specific situation you are facing, a conversation about your facts can help you decide the right next step.

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This definition provides general information and does not constitute legal advice. Laws change, and their application depends on the facts of a matter. For advice on your specific situation, consult a qualified lawyer.