Do I need an indemnification clause?
The most important part of an indemnification clause is that it protects the indemnified party from lawsuits filed by third parties. This protection is important because damaged parties are still able to pursue compensation for their losses even if this clause isn’t in the contract.
Can employer require employee to indemnify?
Indemnification in California Under California law, employers must indemnify their employees, and defend them in court, if the lawsuit against the employee is brought for actions that occurred in the scope of the employee’s employment.
How do you limit an indemnification clause?
You should look to limit indemnification clauses by narrowing their scope, putting in caps on damages, and clearly defining the indemnifiable acts (i.e. the representations and warranties in the example above). Also consider purchasing insurance as a means to limit your financial risk.
Who is entitled to indemnification in an employee sample clause?
Employee is hereby entitled to indemnification for Employee’s acts or omissions in Employee’s capacity as an Employee or officer of the Company to the same extent as the Company’s other senior Employees and in the manner provided by the Company’s bylaws.
What happens to the indemnification agreement after termination?
The obligations under the Indemnity Agreement shall survive the termination of this Agreement. Indemnification of Employee.
Can a lawyer review an indemnity insurance contract?
We’re not Attorneys and we know that; however, we are often called on to review contracts from our clients and their vendors and we are glad to do that from a Risk Management and Insurance perspective. We even field calls from Attorneys that understand contract law, but they don’t know how the contract language affects the insurance transaction.
Are there indemnity clauses in corporate bylaws?
Although some corporate bylaws contain indemnity provisions for officers and directors, executive employees should not simply rely on such general provisions for protection. The indemnity provisions contained in bylaws may be permissive, vague, or may not cover all potential issues that could arise.
Employee is hereby entitled to indemnification for Employee’s acts or omissions in Employee’s capacity as an Employee or officer of the Company to the same extent as the Company’s other senior Employees and in the manner provided by the Company’s bylaws.
Do you need indemnity clause in your contract?
Some may treat an indemnity clause as a boilerplate clause that does not need great attention if any, but that could be a mistake. Making assumptions about any clause in a contract could land you in legal situations that you did not anticipate. In the case of indemnity, you may find that you lack protections that you assumed you had.
What does mutual indemnification mean in a contract?
For instance, if your contract includes a mutual indemnification clause, it means that both contracted parties have agreed to cover losses that result from a breach of contract. With one-way indemnification, only one party is indemnified, meaning only their losses would be covered.
The obligations under the Indemnity Agreement shall survive the termination of this Agreement. Indemnification of Employee.