Are electronic signatures valid?

Yes. Electronic signatures are legally enforceable in interstate and most intrastate transactions under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met.

Do indemnities need notarization?

Generally no; notarization is not required for most indemnity agreements. Notarization may be advisable when documents relate to real estate or when local rules or evidence requirements make acknowledgment helpful.

Who should sign on behalf of a company?

An authorized officer or agent with contract-signing authority should sign. For corporations, verify board resolutions or articles of incorporation to confirm authority before execution.

Can an indemnity be capped?

Yes. Parties commonly negotiate monetary caps, exclusions, and baskets to limit exposure; caps should be explicit and tied to measurable values like contract price or insurance limits.

How do I revoke or amend an indemnity?

Revocation or amendment requires the parties' mutual written agreement unless the contract includes unilateral amendment rights. Document changes in a signed amendment referencing the original agreement.

How long should I retain executed agreements?

Retain executed indemnities for the active term plus applicable statutory windows; see federal standards like IRS rules (IRC §6501(a)) and HIPAA rules for healthcare records (45 CFR §164.530(j)).

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Indemnity Agreement

Indemnity Agreement

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What an Indemnity Agreement Is and When It Applies

An Indemnity Agreement is a contract in which one party (the indemnitor) agrees to compensate another party (the indemnitee) for specified losses, liabilities, or claims arising from defined actions or events. Typical uses include protecting a business from third-party claims, allocating risk between contracting parties, and specifying defense and settlement obligations. Indemnity language varies by industry and may cover legal costs, damages, and investigation expenses; parties often negotiate scope, caps, and exclusions to reflect commercial intent and regulatory requirements.

Why an Indemnity Agreement Matters

A clear indemnity shifts financial responsibility for specified claims, reduces litigation uncertainty, and documents who defends and pays for losses.

Who Commonly Prepares and Signs Indemnity Agreements

Typical users range from corporate legal teams to individual contractors and property owners.

Contractors and subcontractors managing project risk and third-party claims
Landlords, tenants, and brokers allocating liability in leases or transactions
Service providers and vendors protecting against customer claims

Parties should confirm signatory authority and any industry-specific addenda before execution.

Step-by-Step: How to Complete an Indemnity Agreement

Complete the agreement in a logical sequence to ensure consistency and reduce rework.

01

Gather Documents: Collect IDs, corporate formation documents, and related contracts first.
02

Define Scope: Describe precise events, claims, and third parties covered by indemnity.
03

Set Limits: Agree on monetary caps, exclusions, and survival periods.
04

Sign and Date: Have authorized signers execute and record the Effective Date.

Core Clauses to Include in a Professional Indemnity Agreement

These essential components form the legal backbone of a robust indemnity and should be tailored to the transaction and applicable law.

Indemnity Clause

State who indemnifies whom, the types of claims covered, and whether indemnity is primary or secondary to insurance obligations.

Defense and Settlement

Allocate control over defense, approval rights for settlements, and who pays attorneys' fees and court costs.

Scope and Exclusions

List specific exclusions (e.g., gross negligence, willful misconduct) and carve-outs to limit unintended liability.

Limitation of Liability

Specify monetary caps, consequential damages waiver, and any indemnity carve-outs tied to contract value.

Notice Requirements

Define how and when claims must be reported, required documentation, and timelines for responding to claims.

Survival and Duration

State survival periods after termination and whether certain obligations extend beyond the contract term.

Security and Compliance Considerations for Executing Indemnities

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

Legal Frameworks: ESIGN and UETA compliance

Healthcare: HIPAA-compliant when BAA executed

Audit Trail: Timestamped audit logs and signer attribution

Certifications: SOC 2 Type II and ISO 27001 available

Accessibility: WCAG 2.0 Level AA support

Common Risks and Legal Consequences to Watch For

Unlimited Exposure: Potentially unlimited damages

Defense Costs: Responsibility for litigation expenses

Insurance Gaps: Coverage exclusions may leave parties uninsured

Invalid Provision: Overbroad clauses may be severed

Tax Implications: Indemnity payments may trigger tax reporting

Enforceability: State law may limit certain indemnities

Frequent Drafting and Execution Errors

Using vague language such as 'all claims' without defined scope, which creates interpretive disputes and litigation risk.
Omitting notice procedures or timelines, which can lead to disputed defenses and waived indemnity rights.
Failing to confirm signer authority or corporate approval, causing enforceability challenges based on lack of authorization.
Not matching indemnity caps with insurance coverage amounts, leaving gaps when claims exceed policy limits.

Typical Process for Preparing, Executing, and Recording an Indemnity

A clear workflow speeds completion and documents compliance steps from drafting through secure storage.

Draft: Prepare language aligned to transaction and applicable law
Review: Legal and risk teams confirm scope and caps
Sign: Execute with authorized signatures, in-person or electronically
Store: Archive final executed copy with audit trail

Digital Workflow Settings for Online Completion

Configure these settings when you complete and distribute the agreement electronically.

Field	Configuration
Signature Method	E-signature or notarized wet-sign
Authentication	Email, SMS code, or advanced KBA
Conditional Fields	Show based on prior answers
Retention	Specify archival length and access

Technical Options for Electronic Execution and Delivery

Choose a platform that supports secure signing, authentication, and storage for legal records.

Integrations: Salesforce, Microsoft 365, NetSuite supported
File Formats: PDF, DOCX, and HTML accepted
Authentication: Email, SMS, KBA, or SSO options

Ensure the chosen service meets compliance needs (ESIGN/UETA, HIPAA BAA if healthcare) and retains audit trails.

Key Timeframes to Document in the Agreement

Specify timing requirements clearly to preserve rights and trigger obligations consistently.

Effective Date:

Date obligations begin; use MM/DD/YYYY format

Notice of Claim:

Agree a deadline to notify indemnitee (commonly 30–90 days)

Cure Period:

Time allowed to remedy a breach, often 30 days

Defense Acceptance:

Period to accept defense or risk losing control

Statute Limitations:

Apply state-specific limitation periods for suit

eSignature Vendor Comparison for Executing Indemnity Agreements

Compare starting price and essential features relevant to executing indemnities securely; signNow appears first per table convention.

	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 by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies	Varies	Varies

Real-World Indemnity Examples

These condensed examples illustrate typical indemnity uses and drafting choices.

Construction Contract

A general contractor required subcontractor indemnity for third-party injury claims arising from work site conditions.

Point: Lien and insurance ties.
Outcome: Subcontractor provided insurance certificates and agreed to a capped indemnity, reducing contractor exposure while preserving competitive pricing.

Software Services Agreement

A vendor agreed to indemnify a customer for IP infringement claims tied to delivered software.

Point: Defense control and settlement consent retained by customer.
Outcome: Vendor added carve-outs for open-source components and secured an indemnity cap aligned to the contract value after negotiation.

FAQs: Common Questions About Indemnity Agreements

Answers to frequent questions about enforceability, signing, and practical execution of indemnity provisions.

Need help? Contact support

Are electronic signatures valid?
Yes. Electronic signatures are legally enforceable in interstate and most intrastate transactions under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met.
Do indemnities need notarization?
Generally no; notarization is not required for most indemnity agreements. Notarization may be advisable when documents relate to real estate or when local rules or evidence requirements make acknowledgment helpful.
Who should sign on behalf of a company?
An authorized officer or agent with contract-signing authority should sign. For corporations, verify board resolutions or articles of incorporation to confirm authority before execution.
Can an indemnity be capped?
Yes. Parties commonly negotiate monetary caps, exclusions, and baskets to limit exposure; caps should be explicit and tied to measurable values like contract price or insurance limits.
How do I revoke or amend an indemnity?
Revocation or amendment requires the parties' mutual written agreement unless the contract includes unilateral amendment rights. Document changes in a signed amendment referencing the original agreement.
How long should I retain executed agreements?
Retain executed indemnities for the active term plus applicable statutory windows; see federal standards like IRS rules (IRC §6501(a)) and HIPAA rules for healthcare records (45 CFR §164.530(j)).

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