Types of Indemnity
Depending on the situation and the parties’ agreement, there are many forms of indemnification. Typical forms of indemnification include the following:
1. Express indemnity: This is a written indemnity clause that specifies the terms and conditions of the indemnification, such as the parties involved, the situations covered, and the degree of risk assumed by the indemnifying party.
2. Implied indemnity: This is an unwritten indemnity that arises from the nature of the relationship or the conduct of the parties, such as a partnership, a joint venture, or a fiduciary duty.
3. Broad-form indemnity: This is an indemnity clause that makes the indemnifying party liable for their own negligence as well as the negligence of the indemnitee or a third party. This type of indemnity is often prohibited or restricted by law in some states or countries.
4. Intermediate form indemnity: This is an indemnity clause that makes the indemnifying party liable for their own negligence and the joint or concurrent negligence of the indemnitee, but not the sole negligence of the indemnitee. This type of indemnity is more common and acceptable than the broad form of indemnity.
5. Limited-form indemnity: This is an indemnity clause that makes the indemnifying party liable only for their own negligence and not the negligence of the indemnitee or a third party. This type of indemnity is the most limited and favorable for the indemnifying party. In commercial contracts, legal contracts, and loan agreements,
6. Third-party indemnity: It is a type of indemnity that shields the indemnitee from claims or lawsuits brought by third parties, such as suppliers, customers, or regulators.
7. Financing indemnity: It is a type of indemnity that shields the lender from losses or damages brought on by the borrower’s default or breach of contract. Such clauses are frequently found in loan agreements, mortgages, and bonds.