Can the agreement be e-signed?

Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. §7001) and UETA, provided intent, consent, attribution, and reliable record retention are met. Exceptions for certain testamentary or court-ordered documents do not typically apply to indemnity agreements.

Is notarization required for validity?

Generally no; indemnity agreements do not require notarization to be enforceable. Notarization may aid evidentiary weight or be required by corporate bylaws or specific state rules; check corporate charter and state requirements before adding notary or witness lines.

Who must sign the indemnity agreement?

Authorized corporate officers or directors with corporate authority should execute on behalf of the entity; individual directors sign where they are indemnitees. Verify authority through board resolutions and record execution in corporate minutes to prevent later challenges to authority or enforceability.

What information must the form include?

Full legal names of parties, titles, effective date (MM/DD/YYYY), detailed scope of covered claims, limitations or caps, advancement procedures, insurance coordination clauses, and a signature block with printed names, titles, and dates.

How long to retain records?

Retain active agreements for the term plus at least three years; retain tax-related or finance records per IRC §6501(a) (three years), and healthcare-related records for six years under 45 CFR §164.530(j). State rules may require longer retention.

Can agreement terms be amended later?

Amendments are possible if the agreement contains an amendment clause and all required corporate approvals are obtained. Document amendments in writing, executed by authorized signatories, and update corporate records and insurance notices to preserve coverage and enforceability.

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Directors Indemnity Agreement

Directors Indemnity Agreement

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DIRECTORS INDEMNITY AGREEMENT

This Directors Indemnity Agreement (the "Agreement") is entered into as of by and between Company Name: , a corporation with registered office at (the "Company"), and Director Name: of address (the "Director").

RECITALS

WHEREAS, the Director is or may be a director, officer, or trustee of the Company and may serve in similar capacities for subsidiaries or other entities at the request of the Company; and

WHEREAS, the Company considers it desirable to provide indemnification to the Director to the fullest extent permitted by applicable law to encourage qualified persons to serve as directors; and

WHEREAS, the parties wish to set forth their agreement with respect to the indemnification and advancement of expenses of the Director.

NOW, THEREFORE

In consideration of the premises and mutual covenants contained herein, the parties agree as follows:

1. DEFINITIONS

1.1 "Claim" means any threatened, pending or completed action, suit, proceeding, investigation, arbitration or alternative dispute resolution, whether civil, criminal, administrative or investigative, and whether formal or informal.

1.2 "Losses" means all losses, liabilities, damages, fines, penalties, costs and expenses (including reasonable attorneys' fees, expert fees, and amounts paid in settlement) actually and reasonably incurred in connection with any Claim.

1.3 "Indemnified Person" means the Director and any person who was or is serving at the request of the Company as a director, officer, employee, fiduciary, trustee or agent of the Company or of another enterprise.

2. INDEMNITY

Subject to the limitations set forth in Section 5, the Company shall indemnify and hold harmless the Indemnified Person from and against any and all Losses arising out of or as a result of any Claim to which the Indemnified Person is a party or is threatened to be made a party by reason of the fact that the Indemnified Person is or was serving in the capacity described in this Agreement, provided that the Indemnified Person acted in good faith and in a manner the Indemnified Person reasonably believed to be in or not opposed to the best interests of the Company.

3. ADVANCEMENT OF EXPENSES

The Company shall, to the maximum extent permitted by law, advance to the Indemnified Person all reasonable fees and expenses incurred in defending any Claim (including reasonable attorneys' fees) promptly upon receipt by the Company of a written request therefor and a written statement of such fees and expenses. Any advancement shall be subject to the Indemnified Person providing an undertaking to repay such amounts if it is ultimately determined that the Indemnified Person is not entitled to indemnification under this Agreement.

4. PROCEDURE FOR CLAIMS

4.1 Notice. The Indemnified Person shall give the Company prompt written notice of any Claim for which indemnity is sought; provided that failure to give prompt notice shall not relieve the Company of its indemnification obligations except to the extent the Company is prejudiced thereby.

4.2 Defense and Settlement. The Company shall be entitled to assume and control the defense of any Claim and to employ counsel of its choice at the Company's expense. The Indemnified Person shall have the right to participate in the defense of any such Claim at the Indemnified Person's expense. The Company shall not settle any Claim in a manner that would impose any monetary or non-monetary obligation or limitation on the Indemnified Person without the Indemnified Person's prior written consent, which consent shall not be unreasonably withheld.

4.3 Cooperation. The Indemnified Person shall cooperate fully with the Company in the defense or settlement of any Claim, including providing reasonable access to documents and witnesses.

5. LIMITATIONS ON INDEMNITY

Notwithstanding any other provision of this Agreement, the Company shall not be obligated to indemnify the Indemnified Person for Losses to the extent that such Losses result from the Indemnified Person's gross negligence, willful misconduct, or knowing violation of law, in each case finally adjudicated by a court of competent jurisdiction.

6. INSURANCE

The Company shall use commercially reasonable efforts to procure and maintain directors' and officers' liability insurance covering the Indemnified Person in such amounts as are customary for companies of similar size and business. The existence of such insurance shall not limit or otherwise affect the Company's obligations under this Agreement.

7. THIRD-PARTY RIGHTS AND SUBROGATION

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the Indemnified Person's rights of recovery, and the Indemnified Person shall execute all papers and take such action as may be reasonably required to secure such rights.

8. DURATION; SURVIVAL

The rights to indemnification and advancement of expenses provided by this Agreement shall continue during the Indemnified Person's period of service and shall survive cessation of such service and shall inure to the benefit of the Indemnified Person's heirs, executors and administrators.

9. REMEDIES

The rights provided in this Agreement are in addition to any other rights the Indemnified Person may have under the charter, bylaws, any agreement, statute or otherwise. The remedies provided herein are cumulative and not exclusive of any other remedies available at law or in equity.

10. NOTICES

Notices to Company Notices to Director

All notices required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by nationally recognized overnight courier, or sent by certified mail, return receipt requested, to the addresses set forth above or to such other address as either party may specify in writing.

11. AMENDMENT; WAIVER

No amendment or waiver of any provision of this Agreement shall be effective unless made in a written instrument signed by both parties. The failure or delay of either party to exercise any right under this Agreement shall not operate as a waiver of such right.

12. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the state or jurisdiction specified below without regard to its conflict of laws rules.

Governing Law State or Jurisdiction

13. ENTIRE AGREEMENT; SEVERABILITY

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and communications, whether written or oral. If any provision of this Agreement is held to be invalid or unenforceable under applicable law, such provision shall be modified to the minimum extent necessary to make it valid and enforceable, or if modification is not possible, such provision shall be severed, and the remaining provisions shall remain in full force and effect.

14. COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures transmitted by electronic means shall be deemed original signatures for all purposes.

15. MISCELLANEOUS

The interpretation of this Agreement shall not be strictly construed against either party as the drafter. All headings are for convenience only and shall not affect interpretation. The Company may not assign its obligations hereunder without the prior written consent of the Director.

Company

Printed Name:

By:

Date:

Director

Printed Name:

By:

Date:

What a Directors Indemnity Agreement Is

Directors Indemnity Agreement is a contract in which a corporation or other entity agrees to indemnify and advance legal costs for its directors and officers for claims arising from their corporate actions. The agreement defines covered claims, standards for advancement, limits on indemnity (caps, exclusions for willful misconduct or fraud), and procedures for defense and reimbursement. It supplements corporate bylaws or charter provisions and often addresses claim notice, choice of law, and dispute resolution. Properly drafted, it clarifies risk allocation between the entity and its board members.

Why this Agreement Matters to Directors and Corporations

Protects individual directors by shifting defense costs and liabilities to the company, encourages independent decision-making, and reduces personal financial exposure. It also helps organizations retain qualified board members and provides clarity on procedures for claims and cost advancement.

Who Prepares and Signs This Agreement

Corporations, board members, corporate counsel, and outside counsel commonly prepare or review Directors Indemnity Agreements before board adoption or contract execution.

Public and private corporations seeking board protection and clarity on liability allocation.
Individual directors or officers negotiating indemnity terms during appointment or separation.
Corporate counsel, general counsel, and external counsel drafting or approving indemnity language.

Early counsel involvement prevents gaps, ensures compliance with bylaws, and aligns indemnity with corporate governance policies.

Primary Roles Involved

General Counsel

Responsible for drafting and reviewing indemnity terms to align with corporate charter and bylaws, advising the board on risk allocation, and coordinating approvals. Ensures advancement provisions, caps, and defenses are clear and consistent with insurance coverage and corporate indemnification policies.

Director / Officer

Signs as an indemnitee when accepting board roles, confirms understanding of covered claims and any exclusions, and follows notice procedures for claims or requests for advancement. May negotiate gross negligence, willful misconduct, or fraud carve-outs prior to execution.

Security and Compliance Considerations

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest

Certifications: SOC 2 Type II; ISO 27001; PCI DSS

HIPAA: Compliant — BAA available when required

21 CFR Part 11: Supports FDA electronic records compliance needs

ESIGN/UETA: Meets ESIGN and UETA standards for e-signatures

Accessibility: WCAG 2.0 Level AA compliance

Key Risks and Potential Consequences

Personal Liability: Directors may face unreimbursed legal costs

Void Indemnity: Improper execution can render agreement unenforceable

Insurance Gaps: Claims outside policy limits leave directors exposed

Board Approval: Lack of required approvals may invalidate coverage

Tax Consequences: Incorrect reporting may trigger IRS scrutiny

Claims Timing: Failure to timely notify can limit recovery

Common Preparation Mistakes to Avoid

Ambiguous scope language leads to disputes over which claims are covered and can result in litigation over interpretation, increasing defense costs.
Failing to include advancement terms or a prompt reimbursement clause may leave directors personally responsible for defense expenses while disputes are resolved.
Not aligning the agreement with corporate bylaws or charter can create conflicts that render indemnity provisions ineffective or unenforceable.
Overlooking exclusions for fraud, willful misconduct, or criminal acts may lead to overbroad indemnification unintended by the company or insurers.

Step-by-Step: Completing the Agreement

Gather corporate details and board approvals, define indemnity scope, and prepare signature blocks before circulation for signatures.

01

Collect Details: List parties, corporate names, and officer titles.
02

Define Scope: Specify covered claims, time limits, and exclusions.
03

Set Advancement: State advancement procedures, escrow, and reimbursement terms.
04

Obtain Signatures: Get authorized signers and notarizations if required.

Typical Execution Flow

Typical flow from drafting through execution: prepare draft, secure approvals, obtain signatures, and distribute executed copies to stakeholders and records.

Draft: Counsel drafts language tailored to corporate needs.
Approve: Board or committee adopts resolution approving indemnity.
Execute: Authorized officers sign; consider notarization or witness.
Record: Store executed agreement in corporate minute book and electronic records.

Core Sections to Include in a Professional Agreement

Essential sections of a Directors Indemnity Agreement clarify who is protected, what claims are covered, how defense costs are advanced, and the limits, exclusions, and procedures governing claims.

Indemnity Clause

Defines indemnified persons, the scope of covered liabilities, and whether indemnity includes judgments, settlements, damages, penalties, or regulatory fines. Precision prevents disputes over claim coverage and insurer coordination.

Advancement

Specifies defense-cost advancement procedures, timing for payments, any security or escrow requirements, and repayment obligations if indemnity later deemed inapplicable. It should also identify who controls defense and settlement decisions to avoid conflicts.

Exclusions

Lists standard exclusions such as fraud, willful misconduct, criminal acts, or matters barred by law; also include limitations on coverage for breaches of fiduciary duty where prohibited.

Duration

States effective date, survival of indemnity post-termination, and any sunset or survival provisions tied to statute of limitations or insurance policy periods. Draft clearly to avoid ambiguity about continuing obligations after departure.

Defense Control

Specify whether the company controls defense and settlement or if the director may retain counsel, and require consent provisions to prevent conflicts and undue settlements.

Limitations

Notes monetary caps, aggregate limits, and coordination with D&O insurance; addresses reimbursement obligations if indemnity was improper or recovery follows final judgment. Include procedure for insurer subrogation and notice to insurer to preserve coverage.

Key Timing Milestones to Track

Typical timing milestones include board approval, effective date, claim notice windows, and required recordkeeping steps after execution.

Board Approval:

Adopt a board resolution prior to execution, if required.

Effective Date:

Enter agreed MM/DD/YYYY on signature page.

Notice Period:

Specify claim notice window, commonly 30–90 days.

Advancement Timing:

State payment timing upon receipt of documentation.

Recordkeeping:

File executed agreement in minute book and electronic repository.

Digital Signing and Platform Requirements

Digital signing and storage require compatible formats, access controls, and audit trails to support enforceability.

File Formats: PDF and DOCX accepted; preserve signed PDF/A.
Authentication: Email, SMS code, or advanced signer verification available.
Integrations: Connect to CRM, cloud storage, and document management.

eSignature Pricing and Key Capability Comparison

Compare entry pricing and key capabilities for common eSignature vendors relevant to signing Directors Indemnity Agreements.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies	Varies	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently Asked Questions About Directors Indemnity Agreements

Answers to frequent questions about completing, validating, and executing a Directors Indemnity Agreement, including e-signature and storage considerations.

Need help? Contact support

Can the agreement be e-signed?
Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. §7001) and UETA, provided intent, consent, attribution, and reliable record retention are met. Exceptions for certain testamentary or court-ordered documents do not typically apply to indemnity agreements.
Is notarization required for validity?
Generally no; indemnity agreements do not require notarization to be enforceable. Notarization may aid evidentiary weight or be required by corporate bylaws or specific state rules; check corporate charter and state requirements before adding notary or witness lines.
Who must sign the indemnity agreement?
Authorized corporate officers or directors with corporate authority should execute on behalf of the entity; individual directors sign where they are indemnitees. Verify authority through board resolutions and record execution in corporate minutes to prevent later challenges to authority or enforceability.
What information must the form include?
Full legal names of parties, titles, effective date (MM/DD/YYYY), detailed scope of covered claims, limitations or caps, advancement procedures, insurance coordination clauses, and a signature block with printed names, titles, and dates.
How long to retain records?
Retain active agreements for the term plus at least three years; retain tax-related or finance records per IRC §6501(a) (three years), and healthcare-related records for six years under 45 CFR §164.530(j). State rules may require longer retention.
Can agreement terms be amended later?
Amendments are possible if the agreement contains an amendment clause and all required corporate approvals are obtained. Document amendments in writing, executed by authorized signatories, and update corporate records and insurance notices to preserve coverage and enforceability.

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