Business Setup & Legaladvanced
Indemnity Clause
Definition
A part of a contract where one side agrees to cover the other for certain losses, costs or claims that might arise.
Why it matters
An indemnity clause decides who pays if something goes wrong, so reading it carefully protects you from quietly taking on someone else risk.
Example
A supplier contract may include an indemnity clause saying the supplier will cover you if their faulty goods harm a customer.
Related terms
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