indemnification
A contract clause where one party agrees to cover the other's losses arising from specified events, such as third-party claims.
Definition
Indemnification is a promise to compensate another party for certain losses or legal claims. In agency contracts, an agency might indemnify a client against claims that its creative work infringes someone else's copyright, while the client indemnifies the agency against claims arising from materials the client supplied. The clause should define what triggers it, what costs are covered, and whether there is a cap. Because wording is technical and laws differ, it deserves legal review. Both sides should understand it before signing instead of treating it as boilerplate.
In a sentence
The agency agreed to indemnify the client if its photography breached a third party's rights.
The client's indemnity covered claims about supplied product claims.
