When two parties enter into a business agreement, there is always a potential for risk. An indemnity agreement is a legal contract that helps to mitigate that risk by shifting liability from one party to the other in specific circumstances.
Here is an example of an indemnity agreement:
AGREEMENT BETWEEN [PARTY A] AND [PARTY B]
1. Indemnification. Party A shall defend, indemnify, and hold harmless Party B, its officers, directors, employees, and agents from and against any and all claims, damages, losses, liabilities, and expenses (including reasonable attorneys` fees and costs) arising out of or in connection with any breach by Party A of its obligations under this Agreement.
2. Limitation on Liability. Party A`s liability under this Agreement shall be limited to the amount of fees paid to Party A by Party B under this Agreement.
3. Exceptions. Party A`s obligation to indemnify Party B under this Agreement shall not apply to any claims or damages arising out of or in connection with (a) Party B`s negligence or willful misconduct, (b) any third-party products or services used by Party B in connection with its business operations, or (c) any actions or omissions of Party B that are not authorized by this Agreement.
4. Notice and Cooperation. In the event that Party B receives notice of any claim or action for which Party A is obligated to indemnify Party B under this Agreement, Party B shall promptly notify Party A in writing. Party A shall have the right to defend or settle any such claim or action as it deems appropriate, provided that Party B cooperates with Party A in the defense or settlement of such claim or action.
This is just one example of an indemnity agreement – the specific terms of an indemnity agreement will depend on the nature of the business relationship between the parties involved, as well as the level of risk involved. It is always important to consult with legal counsel when drafting an indemnity agreement to ensure that it is legally valid and enforceable.