Ever been asked for an "indemnity" in a contract and wondered what it truly means for your business? Understanding indemnity clauses is crucial, especially for startups and innovators navigating complex agreements.
In this insightful video, Phil Crowley, founder of Crowley Law LLC and a seasoned corporate lawyer, breaks down the concept of indemnity. He explains that an indemnity is an agreement where one party (the indemnifying party) agrees to hold the other party (the indemnified party) harmless from specific liabilities. These clauses often come into play when there's a concern that one party's actions, whether through negligence or intentional wrongdoing, could harm the other.
Phil clarifies that indemnities are frequently limited to third-party claims and provides a clear example: imagine an employee of your company accidentally damages a car in a client's parking lot. If that client is sued by the car's owner, an indemnity clause could require your company (or your insurance) to cover the defense costs and damages.
Key takeaways from this video include:
What an indemnity clause is and the roles of the indemnifying
and indemnified parties.
Common scenarios where indemnities are requested.
The significance of third-party claims in indemnity
provisions.
The potential for indemnity clauses to be drafted overly
broadly.
The critical importance of seeking legal counsel to understand and
potentially limit your liability under an indemnity.
How to consider appropriate insurance coverage when faced with
indemnity obligations.
Negotiating contracts can be daunting, and terms like
"indemnity" carry significant weight. Phil Crowley
emphasizes that carefully reviewing and understanding indemnity
provisions is vital to protect your company from unforeseen
liabilities.
Don't let complex contract language put your startup at risk. Learn how to approach indemnities strategically.
If you're a founder, innovator, or entrepreneur in the life sciences, technology, or biotech sectors, understanding your contractual obligations is key to your success.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
