5 Things to Consider When Determining Your Indemnity Definition
When it comes to determining an indemnity definition, there are many factors to consider3 min read
When it comes to determining an indemnity definition, there are many factors to consider. As a Los Angeles business, understanding the local law governing agreements of this nature is essential. To ensure the best protection of your business, it is also prudent to have legal counsel that is knowledgeable of local regulation when it comes to the formulation of your indemnity agreement. Here are the top 5 things to consider when determining your indemnity definition.
1. Understanding Waiver Of Indemnity
One important thing to consider is the inclusion of a waiver of indemnity clause. This clause essentially limits one or more of the parties involved from pursuing legal action should an incident occur that meets the criteria for a claim. It is a heavily negotiated clause, and understanding the nuances of the law that pertain to it is important. Having a knowledgeable attorney review and offer insight into this clause will help you make the best decision that suits your business, as well as protecting it in the future.
2. Indemnification Clause
Indemnification is the protection against legal liability when something goes wrong. It is an agreement used in contracts that outline who is responsible for taking care of the financial and legal obligations when an incident occurs. There are a few types of indemnification clauses, and it is advisable to have a qualified lawyer review and discuss them all to ensure that the clause you choose is the best fit for your business. It is also important to note that each state in the US will have its own laws governing these clauses, and knowing the regulations where you are located is important when drafting the agreement.
3. Potential Financial Liability
Knowing the financial burden associated with an incident should also be taken into consideration. Without a thorough and comprehensive indemnity agreement in place, you may find yourself unexpectedly responsible for costs that you had not planned or budgeted for. Taking into account the potential costs should be an essential part of your indemnity agreement and having legal counsel review it to protect your company from any potential unforeseen outcomes is highly advised.
4. Potential Responsibilities Of The Indemnifying Party
It is important to review the potential responsibilities that the indemnifying party might have in the event of a claim or lawsuit. Knowing the extent of responsibility is essential to any agreement, as it can have a profound effect on the course of action(s) taken should an incident occur. Understanding all the potential costs, including attorney fees, is critical when formulating any indemnity agreement.
5. Breach Of Agreement
It is essential to review your agreement to ensure it is airtight. Seeking the counsel of an experienced attorney to review all language and acknowledgement of any potential breach of contract is vital to protecting your business down the road. Any indemnity agreement should outline the scenario that would be considered a breach of agreement and list any potential penalties should a breach occur.
Conclusion:
Seeking the help of a qualified legal expert is the best way to ensure that your indemnity definition is comprehensive and protects your business. A full review of a contractual agreement like this should be done prior to signing, to include the understanding of all waiver of indemnity, indemnification, and breach clauses. Not taking all the necessary considerations into account could result in painful and expensive legal headaches down the road. Understanding your indemnity definition is essential for success and finding the proper advisor is much easier than trying to fix the problems that occur with a poorly-constructed agreement.
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