Last updated March 26, 2024
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What is an Indemnity Agreement?
An Indemnity Agreement is a document that protects someone from liabilities, losses, legal claims, or damages when they are conducting a service, transaction, or activity. In exchange for this protection, the other party in the agreement gets some form of compensation for their losses. This way, the parties can continue their business relationship and outline a course for legal action should a dispute occur.
People often use this contract when there’s a risk of accidents, injury, or property damage. Signing it confirms a mutual agreement between the parties.
An Indemnity Agreement is also known as a hold-harmless agreement.
Who are the parties in an Indemnity Agreement?
There are two parties in an Indemnity Agreement:
- The indemnitee is the party protected by the agreement.
- The indemnifier is the party that provides protection in the agreement.
These parties may be individuals, corporations, or organizations.
In cases where more than one party requires indemnification, you might have to prepare multiple contracts to ensure that all parties are fully covered. For example, if a venue agrees to host an event, its owners might seek indemnification from the organization hosting the event.
What is the difference between a Release of Liability and an Indemnity Agreement?
Although these documents both protect against liabilities, losses, claims, or damages, an Indemnity Agreement can be more comprehensive than a Release of Liability (also called a Waiver Agreement).
For short-term events and some business relationships, a Release of Liability may be more appropriate than an Indemnity Agreement. For example, a participant in a skydiving event is more likely to sign a Waiver (i.e., agreeing to follow safety instructions and proper use of equipment) than an Indemnity Agreement.
By signing a Release of Liability, the skydiver agrees to take full responsibility for the risks that they are taking. As such, they agree not to sue the skydiving company in the event of an accident, injury, or death.
How do I write an Indemnity Agreement?
Use LawDepot’s Indemnity Agreement template to generate a custom document that suits your needs. Simply answer our questionnaire, then download your document as a PDF or print out a hard copy. Our Indemnity Agreement questionnaire asks you for the following information:
General contract details
1. Who will be protected by the Indemnity Agreement
2. The terms of the Indemnity Agreement, such as
- Requiring the other party to pay liability insurance
- Protection against the costs of criminal proceedings
- The inclusion of a confidentiality clause
- Limiting the amount of monetary protection
3. What the Indemnity Agreement is for, or its category
Party details
1. Your party's information
- Indemnitee details (name of the company or individual
- Full name of the indemnitee
- The indemnitee’s address
2. The other party's information
- Company details (name of the company or individual)
- Full name of the indemnitee
- The indemnitee’s address
1. A description of the service that your party provides and how each party is involved
- Any additional details that you need to provide regarding the services
2. Signing details of the Indemnity Agreement
- The date that the agreement is signed
- Confirmation that witnesses were present at the signing of the agreement
LawDepot’s template also allows you to add any additional clauses you see fit.
Are Indemnity Agreements legally binding?
Yes, Indemnity Agreements are legally binding if they contain all the elements necessary for a valid contract. These elements are:
- Offer and acceptance: The indemnifier offers to relieve the indemnitee of liability. The indemnitee accepts this offer of removal of liability and financial compensation.
- Consideration: Each party member receives something of value in exchange for the other. In this case, the indemnitee is relieved of liability, and the indemnifier somehow benefits from participating in a service, activity, or transaction.
- Intention: The parties have “a meeting of the minds” (i.e., they have agreed to enter into a contract with each other).
- Legality: All elements of the contract abide by Irish laws.
- Capacity: Both parties have the legal capacity to enter the contract.
An Indemnity Agreement can also become invalid due to:
- Negligence causing injury, accident, or property damage
- Fraud causing financial loss and committed online or in-person via correspondence
- Other forms of criminal activity
