For business owners in Chicago and the rest of the country, indemnity agreements offer an important level of protection and can wave liability in the case of a dispute or injury. Although it's beneficial for business owners to have a general idea of what an indemnity agreement entails, the support of experienced legal counsel is needed to ensure the agreement’s correctness and accuracy. Read below to learn more about indemnity protection and find the best legal help for your business.

What is Indemnity?

In its simplest terms, indemnity is a contractual agreement that shifts financial responsibility from one party to another. For example, if one company hires another to construct a building, the first company (the indemnitor) will agree to protect the second (the indemnitee) from any potential damages that could arise during the duration of the project.

Indemnity agreements can also provide additional protection from breaches of contract, injuries, or losses from third parties. Although there are variations and nuances depending on the type of agreement, generally the indemnifier agrees to cover any costs related to the breach of a contract, such as attorney fees, damages, and settlements. Depending on the agreement, the indemnify may also be responsible for other losses, such as medical costs if any workers were injured while on the job.

Types of Indemnity

When drafting an indemnity agreement, the indemnitor and indemnitee need to assess the various types of indemnity protection and decide which ones are applicable to their situation.

The most common types of indemnity coverage are as follows:

• Breach of Contract: This agreement is meant to protect the indemnitee from any kind of contractual breach that takes place. This can include any breach of contract, negligence, or error by either party.

• Third-Party Claims: This type of indemnity helps to prevent financial losses from third parties, such as injury claims filed by employees or customers. In this case, the indemnitor would be responsible for any damages or fees the indemnitee may have to pay as a result of the claim.

• Intellectual Property Infringement: This is a common type of indemnity used in cases where intellectual property, such as a patent or copyright, is being used without proper authorization. The indemnitor would agree to cover the cost of defending any infringement claims, as well as any damages that may result.

• Financial Losses: This type of indemnity provides coverage for any financial losses incurred by the indemnitee. This could include losses resulting from a breach of contract or third-party claims.

• Physical Damage: The indemnitor agrees to be responsible for any physical damage that is caused to the indemnitee’s property or belongings as a result of the breach of a contract or negligence.

Which Indemnity Protection is Right for You?

When it comes to indemnity protection, the type of coverage you need depends on the specifics of your business. For example, if you are a construction company, you may need an indemnity agreement that covers breach of contract and third-party claims. However, if you are a software development company, you may need indemnity protection that covers intellectual property infringement and financial losses.

It’s important to remember that anything that’s included in an indemnity agreement is legally binding and enforceable in court. As such, it’s essential that all parties involved are fully aware of the terms within the agreement. The best way to ensure that an indemnity agreement meets your needs is to consult experienced legal professionals who have a deep understanding of the local laws and regulations.

Getting Legal Help

For business owners in Chicago, UpCounsel can help you find experienced and knowledgeable legal counsel who understand local regulations. Our network of legal professionals offer services on a freelance basis, allowing you to only pay for the services you need. From small businesses to Fortune 1000 companies, our attorneys provide cost effective legal services with the sense of security that comes with utilizing high quality professionals.

UpCounsel’s profile page for each lawyer contains reviews from clients that they have worked with in the past. This helps you to further vet any potential attorney to ensure that they have the right set of skills and knowledge that are suitable for your specific needs.

Access to experienced legal counsel is essential to protect any business. UpCounsel gives business owners in Chicago access to the right attorneys who understand local regulation and are more than capable of supporting your business.

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