What are indemnity clauses and how do they relate to risk management?

What are indemnity clauses and how do they relate to risk management?

Indemnity clauses are provisions in contracts that allocate risk between parties. They protect one party from losses caused by the other party's actions.

Can you give me an example of an indemnity clause?

Sure! An example might be: 'The contractor agrees to indemnify and hold harmless the client from any claims arising from the contractor's negligence.'

How do these clauses help in managing risks?

They help by clearly defining responsibilities and liabilities, which can reduce disputes and financial losses in case of an incident.

Are there any limitations to indemnity clauses?

Yes, limitations can include enforceability issues, especially if they are deemed unconscionable or if they violate public policy.