Indemnitee

An indemnitee is an individual or entity that is protected by an indemnity agreement. This agreement, a legal contract, shields the indemnitee from financial loss or legal liability arising from specified actions, omissions, or events. The protection is typically provided by an indemnitor, who agrees to cover potential damages, expenses, or lawsuits. Indemnitees benefit from risk mitigation, ensuring they are financially secure in the event of covered incidents. They are frequently found in contracts involving insurance, business transactions, and property agreements. The scope and nature of the indemnification are clearly defined within the contract, specifying the extent of protection and the circumstances under which it applies.

Indemnitee meaning with examples

• The company named its board members as indemnitees in the corporate bylaws to safeguard them against legal repercussions from decisions made in good faith. This indemnification provides significant financial protection should the company face litigation.
• As part of the acquisition agreement, the acquiring company became an indemnitee, securing protection against undisclosed liabilities or pre-existing financial obligations. The seller, therefore, indemnified against these possibilities.
• The homeowner, acting as an indemnitee, demanded their contractor hold them harmless and provide sufficient insurance to cover the potential for any damage or liability during the construction project on their property.
• In the event of a product recall due to a manufacturing defect, retailers who sold the product might be indemnitees, protected by a clause that shifts the responsibility for costs associated with the recall to the manufacturer.
• When renting out a property, a landlord often establishes themselves as an indemnitee within the lease agreement. This safeguards them from legal actions taken by the tenant due to accidents on the property, provided negligence by the landlord didn't play a part.