What does duty to indemnify mean?
What does duty to indemnify mean?
The term indemnify is generally interpreted as imposing an obligation on one party (the indemnitor) to pay or compensate the other party (the indemnitee) for certain legal liabilities or losses, but that obligation does not typically arise until the end of a case when the indemnitee has had a judgment entered against …
Does duty to indemnify include duty to defend?
The duty to defend is a term that describes an insurer’s obligation to provide an insured with a defense to claims made under an insurance policy. The duty to indemnify describes an insurer’s obligation to pay a claim for loss or damage against an insured. Both are typically included in a policy’s insuring agreement.
How do courts determine if an insurer has a duty to defend?
Courts typically determine an insurer’s duty to defend its insured under a liability policy in one of two ways. An insurer has a duty to defend if the face of the complaint alleges something covered and does not allege an exclusion to coverage.
What does it mean to tender the defense?
Tendering a defense involves assigning that client’s defense, and the costs associated with that defense, to another party pursuant to a contract or other agreement.
What is a duty to defend policy?
The term “duty-to-defend” essentially means that in the event a claim is made against an insured for an alleged wrongful act, the insurance carrier has the right and duty-to-defend the claim—even if the claim is groundless, false, or fraudulent.
Do employers have to indemnify employees?
California has a peculiarly strong public policy requiring employers to indemnify employees sued for conduct occurring as part of their employment. Labor Code section 2802 codifies this policy. California employers, thus, must indemnify employees if their conduct falls within the scope of employment.
What is a cap on an indemnity clause and why should I care?
What is a Cap on an Indemnity Clause and Why Should I Care? This is essentially an “I’ll protect your back” clause, making the party giving the indemnity responsible to pay back the other party for things they might do wrong, bringing harm to the first party.
Why do you need an indemnity clause?
Indemnification clauses are clauses in contracts that set out to protect one party from liability if a third-party or third entity is harmed in any way. It’s a clause that contractually obligates one party to compensate another party for losses or damages that have occurred or could occur in the future.
How do you limit an indemnity clause?
You should look to limit indemnification clauses by narrowing their scope, putting in caps on damages, and clearly defining the indemnifiable acts (i.e. the representations and warranties in the example above). Also consider purchasing insurance as a means to limit your financial risk.
