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right indemnity is a risk shifting tool in which one party agrees to take responsibility for the liability of another party and the terms of the contract can actually define what the scope of that indemnity obligation is for example you can have an agreement that one party will pay for any claims or lawsuits that arise out of a particular project even if the negligence that is alleged in the claim or lawsuit is the negligence of the party you are indemnifying so you can agree to limit that indemnity to only lawsuits or claims that arise out of your work so I will indemnify another party if something I do is a cause of the lawsuit or the claim you can also limit indemnity obligations by excluding certain kinds of claims and lawsuits for example a party could agree to indemnify another party for lawsuits or claims however they will not identify them for things that are caused by the sole negligence of the other party which means you have control over exactly what you're going to cover and what you're not going to cover depending on how you structure the indemnity obligation you can have an agreement that you will indemnify someone for their liability which means if they end up having to pay a judgment you will pay that judgment for them you can indemnify someone for their damages which would mean that you pay and reimburse them for whatever amount of damages they have to pay you can have obligations that are limited to property damage you can have obligations that are limited to injuries or liabilities that arise out of someone's employees or their contractors so the big picture on indemnity is it allows parties to shift risk away from themselves and how they structure it determines how much actual protection that they have there's a thing called past their indemnity where you agree to indemnify someone else's agreement to indemnify a third party you may not know who that party is you mean it's possible that you are indemnifying someone that you've never met a risk that you have no control over and it can be devastating it can be very expensive happily there is insurance now that can cover those kinds of risks but it's a sort of thing that that if you don't read indemnity obligations if you don't read the contracts thoroughly you might find yourself in a position where you've bitten off much more than you want to chew one of the things that we tell our clients with regard to any contracts they signed any insurance that they believe they have is it until they take the time to read the entire document for purposes of reviewing an insurance policy reading all the endorsements for purposes of a contract making sure you read all the attachments and exhibits all of those things are imperative if you want to understand what the potential risk that you're either shifting or is being shifted to you you