What is Indemnity
Indemnity is just making good the loss incurred by another. In other words its making compensation payments to one party by the other for the loss occurred. It also described that an understanding that to compensate for business loss or damage from actions of another party.
What is indemnity agreement
Indemnity agreement is a contract that holds a business harmless against any specific loss or damage. Further indemnity agreement assures for the compensation available against the specific loss. This helps you or your business from the Law suits crop up from somebody’s negligence.
Types of indemnity agreement:
Express indemnity: Where there is a written agreement between two parties where one party Expressly Accepts to indemnify the specific loss to the other party.
Implied indemnity: The burden of the indemnity arises out of the Circumstance or by Law (Manufacturer and Agent relationship). It may also arises out of a court order or by customary practice.
Other names for Indemnity agreement
No Fault Agreement
Waiver out agreement
Liability Agreement Release
To whom it will be useful
Example of Indemnity agreement
Example 1: If the specific building destroyed or damages from fire, then the insurance company will indemnify the cost and expenses incurred to the owner.
Example 2: If a Company approaches the website designer, then there will be a mutual indemnity clause that the Company agrees to indemnify the website designer if any copyright issue arises because of duplicate content. At the same time the website designer agrees to indemnify the company if there is any law suit against the company for using duplicate website design/template.
Essential elements of Indemnity contract
Anticipated Loss & Specific Event
Promise of indemnification