Find who covers which losses in a contract's indemnification clause
An indemnification clause shifts the cost of certain losses or claims from one party to the other. What matters is the detail: who indemnifies whom, for which claims, whether the duty includes defending them, and how the indemnity fits with the liability cap. Ask Search+ "What must the supplier indemnify us for, and is that indemnity capped?" and the answer cites the indemnity wording and the cap provisions so you can read them together.
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Last updated October 2026
How to read an indemnity with Search+
- Upload the full agreement
Indemnities depend on the definitions of Losses and Claims and on the limitation of liability section. Upload the whole contract, plus any amendment or schedule that adds specific indemnities, so the answer can cite all the pieces.
- Ask about each direction and each claim type
Ask what the supplier indemnifies, then what the customer indemnifies. Then ask about specific claims one at a time, such as intellectual property infringement, breach of confidentiality or personal injury.
- Follow the procedure and the cap
Open the citations and ask what the indemnified party must do to make a claim: notice, handing over control of the defense, cooperation. Then ask whether indemnities sit inside or outside the liability cap.
Questions to ask about indemnification
Which kinds of third-party claims does each party indemnify the other for?
Does the supplier indemnify us if its product is claimed to infringe someone else's rights, and what are the exceptions?
Does the indemnifying party have to defend claims as well as pay for them, and who controls the defense?
How quickly must we notify the other party of a claim to keep our right to be indemnified?
Are indemnification obligations subject to the limitation of liability, or excluded from it?
Across the vendor agreements in this workspace, which ones include an uncapped intellectual property indemnity?
What to look for in an indemnification clause
Indemnities can be one-way or mutual. Check which party gives each one; a clause may look mutual while covering very different risks for each side.
Many indemnities cover only claims brought by third parties, while some also reach the indemnified party's own direct losses. The definitions of "Claims" and "Losses" usually decide this.
These words often appear together. A duty to defend can require the indemnifying party to run and pay for the defense, not just pay at the end, though the exact effect depends on the contract and the law that applies.
Claim procedures commonly require prompt notice, control of the defense by the indemnifying party and no settlement without consent. Failing a step can reduce the protection.
Indemnities are frequently carved out of the limitation of liability or given a separate cap. Read the two clauses together before assuming either is the whole picture.
Ask one question across the whole contract and Search+ can cite the indemnity, the definitions and the cap in a single answer, each from its own section.
Indemnity wording and what to ask next
| Wording you may see | What it usually signals | A follow-up question |
|---|---|---|
| "defend, indemnify and hold harmless" | A combined duty to defend and cover losses | Who controls the defense and any settlement? |
| "third-party claims" | Coverage limited to claims by outsiders | Are our own direct losses covered anywhere? |
| "arising out of or relating to" | Broad causal wording | Does the indemnity cover claims only partly caused by the other party? |
| "to the extent caused by" | Coverage in proportion to fault | How are losses split if both parties contributed? |
| "prompt written notice" | A procedural condition | What happens if notice of a claim is late? |
| "shall not be subject to the limitations" | An uncapped or separately capped indemnity | What limit, if any, applies to this indemnity? |
What is an indemnification clause?
An indemnification clause is a contract term in which one party promises to compensate the other for specified losses, liabilities or claims, often those brought by third parties, and in many contracts also to defend the other party against those claims.
Indemnification clause questions
Can Search+ tell me what we are indemnified for?
How do I check whether an indemnity is capped?
Does it pick up indemnities outside the main clause?
What does a duty to defend add?
Can I compare indemnities between two draft contracts?
Is Search+ advising me on indemnity risk?
Know who pays when a claim arrives
Start a workspace, upload the contract, and ask what each side must cover.
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