How to Properly Structure an Indemnification Agreement with Clients
If you plan on protecting clients from harm through indemnification, or you want the clients to hold you harmless in certain circumstances (which is much more common in a business setting), you'll need an indemnification agreement template you can trust. That's because these agreements need to be legally binding to properly protect you.
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There's no reason to take a chance on an indemnification agreement that won't cover what you need, which can happen if you try to create one yourself. Using a template helps to reduce that risk, because it includes all the legal language you need for the highest level of indemnification protection from your clients.
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Depending on the kind of business you have, an indemnification agreement template may be something that's very important for your needs. Some companies are simply engaged in legal business activities that can really put them at risk. If you're in one of those businesses, you want to be as careful as possible. Here in this article, we'll talk about:
- Important Indemnification Clauses
- Best Practices for This Agreement
- Tips for Securely Signing
- Key Considerations for Indemnification
- Additional Resources
Important Clauses for an Indemnification Agreement
It's always possible that a client won't agree to indemnify your business in certain circumstances. If that's the case, you may want to decide whether parting ways with that client would be a better choice. But most clients understand the need. If you use a strong indemnification agreement template, it can also make the process easier. Some of the most important clauses to include are:
- The Specific Activity -- In most cases, you aren't asking the client to hold your company harmless for everything you do. It's only for certain activities, which should be spelled out.
- Exceptions -- If there are exceptions within the activities, or for certain events or other reasons, those also need to be spelled out clearly in order to be legally binding on the parties.
- Termination -- How the indemnification agreement can be terminated should be explained, since you don't want the client to be able to terminate it without your knowledge.
- Waiver -- In most cases, there aren't any waivers of provisions in an indemnification agreement without agreement from both parties. If that's the case, you want it to be part of the agreement.
When you ask for indemnification, you're asking the client to hold you and your company harmless for any damages you cause in a particular area of life or business. While this can be very standard, it may feel daunting for some clients. With a good indemnification agreement template, they may be more likely to sign.
Best Practices for Indemnification Agreements
By making an indemnification agreement, you're saying that your company wants to be released from liability for specific activities. That means your client can't sue you for harm or damages from those activities, even if they're financially or otherwise harmed by them. That's a big deal to a lot of clients, so proper wording and a good understanding both matter. Some best practices are:
- Being very clear on the activities where indemnification is being requested.
- Not asking for more indemnification than is necessary, to be fair to clients.
- Developing an indemnification agreement that will provide some measure of benefit to both parties.
Indemnification is a serious issue, and not all clients may understand the significance of it. But with a good indemnification agreement template, it's easier for clients to be clear on what rights they're giving up, and what that could mean for them.
Tips for Security in an Indemnification Agreement
As with any type of contract you sign with clients, you want to make sure the agreement is sent, signed, and received correctly. To do that, use Nitro Sign for all your important documents, including indemnification agreements. It's fast, secure, and easy to use.
Key Considerations for Indemnification Agreements
An indemnification agreement template can help you with key considerations you need addressed in your business. Some of these specific considerations include:
- Making certain every detail of the activities to be indemnified against are clear.
- Using a template, so you and your client can feel confident in the legal nature of the agreement.
- Being fair with clients, so they still get the benefit from your services, even while indemnifying some of your activities.
An indemnification agreement template makes the work you'll do with clients in this area much easier.
Additional Resources
Ready to learn even more about an indemnification agreement? Here are additional resources to take a look at:
