Indemnification Agreement: Purpose and Common Protections
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What is an Indemnification Agreement?
An indemnification agreement, also called an indemnity agreement, hold harmless agreement, waiver of liability, or release of liability, is a contract that provides a business or a company with protection against damages, loss, or other burdens. This type of contract allows businesses to carry out their services and/or provide products without the risk of being held responsible for problems in the future.
An indemnification agreement provides additional protection for businesses by ensuring that they are not held liable for damages or losses that occur outside of their control. This agreement allows the company to continue its operations while protecting against lawsuits. An indemnification agreement could also be a clause in a longer contract rather than a separate contract.
Here is an article about what indemnity means.
Purpose of an Indemnification Agreement
This legal document will hold harmless the initial party, the business or company and ensure that they are able to continue its operations and continue providing high quality products and services to its customers. With an indemnification clause or agreement, the business does not have to worry about loss or damages that occur to a third party outside of their own control.
The benefits related to the indemnity agreement include a lack of reason requirement for an indemnified party to prove causation, loss mitigation for the indemnified party, and a decreased level of risk associated with the contractual obligations and supplying of goods or services by the indemnified party.
Here is an article about the purpose of an indemnification agreement.
Common Areas of Protection
Frequently, an indemnification agreement will be created in an insurance agreement between two parties. This could exist in any form of insurance including motor vehicle insurance, health insurance, life insurance, homeowners’ insurance, malpractice insurance, and others.
They are also frequently used in fields such as construction, where the indemnification agreement may protect a contractor or builder who uses specific materials with the purpose of providing specified protection for the property. These agreements or clauses can be found in or used with a construction contract .
Other examples could include waivers of liability from ‘risky’ experiences or businesses, such as amusement parks, gyms, skating rinks, and ski slopes. These types of businesses may also ask their clients to sign liability waivers .
Indemnification agreements can exist in other forms, however, and may be included provisions in many contracts made between two parties. It then covers nearly any loss potentially suffered by the company including court costs, fees, and any settlements reached.
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Examples of Indemnification
Indemnifications will provide protection in a number of different ways, such as:
- A manufacturer of hospital beds has a contract with a hospital where they will provide the beds the facility needs. They then enter into an indemnification agreement with the hospital that says they cannot be sued by patients of the hospital if they are injured in any way while using the beds. They are indemnified from liability for injuries.
- A manufacturer of carnival rides enters into a contract with a carnival to provide them rides for their traveling fair. They enter into an indemnity agreement with the carnival that says they cannot be sued by fair-goers if someone is injured while on one of their rides.
- An individual takes out a car insurance policy on her vehicle. The insurance company indemnifies them from liability for accidents or injuries that occur as a result of the vehicle. If the driver gets into a car accident the insurance company would take care of any claims that are made against the driver or the vehicle.
- Emily is having work done on her home and the entire area is a construction zone. There is debris and tools everywhere. She has all of her contractors sign an indemnity agreement, or hold harmless agreement , that says that will hold harmless the owner of the home in case of any injuries that happen from the mess at the job site.
Here is an article with several examples of indemnification agreements.
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What’s Included in an Indemnification Agreement?
While an indemnification agreement will vary from one situation and one business to another, there are a few different characteristics that will be the same or vastly similar between them.
- Named parties . The two parties to the indemnification agreement are also known as the indemnitee (person being protected) and the indemnifiers (the person doing the protecting).
- Contract . In order to have an indemnity agreement the two parties above must have some form of contract between them that lays out a product or service to be exchanged.
- Liability . The contract should otherwise create some implied liability from the indemnitee to the indemnifier and to third parties.
- Damages, loss, or burden . The indemnification agreement will typically state that it frees the indemnitee from responsibility or liability for ‘damages, loss, or burden.’
- Statement of ‘protection’. The agreement includes a statement that offers the protection, stating that the indemnifier ‘holds harmless,’ indemnifies,’ or ‘releases from liability’ the indemnitee.
- Period of indemnity . The agreement must lay out the specific length of time for which the agreement is in place and payment would be required.
Here is a sample of an indemnification and hold harmless agreement .
Types of Indemnification Agreements
There are two different types of indemnification agreements, which include express and implied indemnity. These specify:
- Express Indemnity . A written indemnity agreement or contract which outlines terms and conditions that are required to be followed by both the indemnitee and the indemnifier. The indemnity is ‘expressly’ written/named.
- Implied Indemnity . An obligation that is not expressly named where the indemnifier can be held responsible to the indemnitee through a reasonableness standard.
We can also look at specific areas where indemnification agreements may be entered into. These can include:
- Construction . An example may be a builder making a claim about the quality or features of the products being used.
- Insurance . An example may be when an individual is involved in an accident that injures another person.
- Rental . An example may be a landlord requiring a tenant to be responsible for injury that occurs to others within their rental property.
- Pet boarding . An example may be a boarding facility being freed from liability if another pet injuries your pet during boarding.
- Licensing . An example may be when a third party uses a service that has been contracted out to another party.
Here is an article with several types of indemnification situations.
Who Signs an Indemnification Agreement?
The two parties of the contract will sign the indemnification agreement. This means the indemnitee, or the person/business/company providing the good/service, will sign the document. The indemnifier, or the person/business/company receiving the good/service, will sign the document as well.
A contract that is not signed by both of these parties may not be legally enforceable. There are exceptions to this rule as noted by the existence of implied indemnification agreements. The implied agreement means that there is no written contract between the parties, but a reasonable person would assume a similar agreement.
If no document is signed, however, it is possible for a suit to occur and then the burden of proof that an implied agreement existed would be on the party being sued.
Here is a sample of an indemnity and hold harmless agreement .
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Meet some of our Indemnification Agreement Lawyers
Alton H.
Alton H.
I am a U.S.-licensed attorney with more than a decade of experience in complex litigation and intellectual property matters. I have practiced at leading Am Law firms including Pillsbury Winthrop Shaw Pittman, Arent Fox, and Sughrue Mion, and I currently operate my own law practice. I have extensive experience handling high-stakes patent litigation, drafting pleadings and briefs, managing large-scale discovery, preparing and defending depositions, and appearing before federal courts and administrative bodies such as the PTAB and ITC. I hold a J.D., cum laude, from The George Washington University Law School and advanced technical degrees in chemistry and chemical engineering, which allow me to efficiently handle technically complex matters. I am admitted in multiple jurisdictions, including New York, Virginia, New Jersey, and the District of Columbia, and I regularly provide high-quality remote legal support to clients nationwide.
"Alton was responsive, thorough, and clear. He reviewed a consulting agreement against my prior employer’s restrictive covenants under two states’ law, delivered a practical risk memo and a redline I could send as is, and caught an issue I hadn’t asked about. Flat fee, on time, no surprises."
Jeff G.
Jeff has 25 years of commercial transactional experience within numerous industries, including finance/banking, telecommunications/utilities, insurance, and software. He is a recognized authority on contracts, software licensing and negotiation. Jeff earned his Juris Doctorate from Valparaiso University School of Law and his Masters in Business Administration from North Carolina State University and is licensed to practice law in North Carolina and Indiana.
"Jeff was very responsive through our project. He did what he said he was going to, and achieved the result we hoped for. I would certainly recommend Jeff and his work. Thank you, Jeff!"
Ricardo A.
Ricardo Aponte Parsi is a real estate and corporate counsel with a 22+-year track record of assessing risk, managing litigation, and building compliance systems to protect organizational interests. Trusted business partner and problem solver, dedicated to delivering exceptional results that advance business objectives through preventive counseling, strategic risk management, and shrewd advocacy. Collaborative team leader and project manager who builds relationships, leads change, and communicates effectively with private and public stakeholders. He obtained a bachelor's degree from Syracuse University (1994) with a major in International Relations and his law degree from the Interamerican University of Puerto Rico School of Law (2000). In May 2014, he completed a Master of Laws from Northwestern University School of Law and a Certificate in Business Administration from IE Business School in Madrid, Spain. In 2018, he completed a second LL.M. at Georgetown University Law School in Securities and Financial Regulation. In 2022, he completed a certification in Privacy Law from Seton Hall University School of Law. He was president of the Board of the Puerto Rico Education Council, the licensing agency for the Commonwealth, and is currently the Chairman of the Board of Trustees of the San Juan Community College. Since November of 2024, he has worked as an attorney-advisor for the United States Air Force Installations, Energy and Environmental Law Division (SAF/GCN) at Lackland Air Force Base, in San Antonio, Texas.SAF/GCN provides legal and policy advice to members of the Secretariat, the Air Staff, and the Space Staff on virtually all matters relating to the Department’s 180 installations, nearly 10 million acres of real estate, Base Realignment, and Closure; annual $7 billion installation and operational energy budgets; annual multibillion-dollar military construction program; $8.3 billion military privatized housing portfolio; programs for environmental planning, compliance, and restoration and natural and cultural resources management; and programs for safety and occupational health. The Division advises the Center of Excellence for Environment, Facilities, and Installations and the Energy, Environmental, and Installations Directorates within the Air Force Civil Engineer Center. Experienced with estate planning, wills, trusts, prenuptial agreements and powers of attorney.
"Ricardo was excellent. His review was thorough and practical, with clear explanations and concrete wording we could use right away .I'd gladly work with him again."
Kenneth G.
Kenneth E. Gray, Jr. is a business and tax attorney who advises entrepreneurs, investors, and closely held companies on transactions, tax planning, disputes, and long-term wealth structuring. He focuses on helping clients make legally sound decisions that also make business sense. Ken’s practice includes business formation and restructuring, mergers and acquisitions, private investments and fundraising transactions, contract drafting and negotiation, and cross-border matters. He also maintains a significant tax practice, advising on federal and state structuring, specialty filings (including partnership, corporate, and non-resident matters), and representing clients in disputes before the U.S. Tax Court and other federal and state tribunals. In addition to his transactional work, Ken handles commercial and business litigation, including tax controversies, financial disputes, and partnership matters. His litigation experience informs how he structures deals and governance documents, with an eye toward preventing disputes before they arise. Ken also advises individuals and families on estate planning, trust formation, tax-efficient wealth transfer strategies, and probate administration, including planning involving closely held businesses and foreign assets. Before practicing law, Ken worked in banking and private equity, including managing a $5 billion emerging markets fund-of-funds portfolio at the U.S. Overseas Private Investment Corporation (OPIC) and serving in equity research at ABN AMRO. That financial background allows him to understand transactions from both the legal and capital perspective. He holds a J.D. from Georgetown University Law Center and an MBA from Yale University. He practices before the U.S. Tax Court, various state courts, and other federal courts.
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Rhea de Aenlle is a business-savvy attorney with extensive experience in Privacy & Data Security (CIPP/US, CIPP/E), GDPR, CCPA, HIPAA, FERPA, Intellectual Property, and Commercial Contracts. She has over 25 years of legal experience as an in-house counsel, AM Law 100 firm associate, and a solo practice attorney. Rhea works with start-up and midsize technology companies.
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Is an indemnification agreement enforceable if it was signed under duress?
I signed an indemnification agreement with my employer after being threatened with termination if I didn't comply, and now I am facing potential liability for a work-related accident. I am wondering if the agreement is enforceable since I signed it under duress, and if I can be held responsible for the damages despite the circumstances surrounding the signing of the agreement.
Randy M.
An indemnification agreement signed under duress may not be enforceable, but whether it can be voided depends on the specific facts of your case and the law in your jurisdiction. Contract law requires voluntary consent. If consent is obtained through coercion, the agreement is generally considered voidable by the party placed under duress. Legal Standard for Duress Courts recognize two main forms of duress. Physical duress involves threats of bodily harm and is the clearest ground to void a contract. Economic duress occurs when someone is pressured into signing due to wrongful or coercive economic threats. The threat of termination can sometimes qualify, but courts apply a high standard. They will look at factors such as whether you had any reasonable alternatives, whether the employer acted in bad faith, and whether the circumstances left you with no meaningful choice but to sign. For example, if you were told you’d be fired unless you signed immediately, with no chance to review the document or seek advice, that kind of artificial urgency could support a duress claim. On the other hand, if you were given time to consider the agreement and could have reasonably sought other employment, courts are less likely to find duress. Employment-at-Will Context Most states follow the at-will employment doctrine, which allows employers to terminate employees for almost any reason that is not illegal. Because of that, courts often treat workplace ultimatums as business pressure rather than wrongful coercion. However, the doctrine doesn’t give employers unlimited power. If the termination threat was used specifically to force you to assume liability for risks the employer is legally responsible for, that can be considered improper and may render the agreement voidable. Shifting Liability to Employees Indemnification clauses in employment contracts are closely scrutinized because employers generally bear the legal duty to maintain safe workplaces. Federal law under the Occupational Safety and Health Act requires employers, not employees, to ensure workplace safety. Courts in many states have refused to enforce agreements that shift liability for workplace accidents from the employer to the employee, especially if the employer is in a better position to insure against those risks. For example, California Civil Code §1668 voids contracts that exempt a party from responsibility for violations of law or duties owed to the public. Similar public policy principles apply in other states. Practical Challenges Even if duress can be established, you may still need to demonstrate that the indemnification terms themselves were unreasonable or unconscionable. Courts will often look at whether the agreement was one-sided, whether you had a meaningful opportunity to negotiate, and whether the employer sought to impose obligations that are inconsistent with public policy. Next Steps If you’re facing liability based on this indemnification clause, it’s important to preserve all evidence of how the agreement was presented to you. Keep records of emails, conversations, or witnesses that can confirm the circumstances of the signing. An employment or contract attorney in your state can evaluate whether the clause is enforceable, raise duress or unconscionability as defenses, and, if necessary, argue that public policy prevents shifting liability to you. On Contracts Counsel, you can connect with experienced contract attorneys who can review your agreement, consider the circumstances surrounding it, and guide you on your next steps.
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