Legal Dictionary Indemnification

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I was responsible for all sorts of compensation in case something went wrong because it wasn`t a standard test. Indemnification usually appears in the form of a clause or provision in a legal contract. An indemnification clause in a contract is a very important obligation because the person entitled to compensation waives his or her ordinary right under the law or waives the right to sue the indemnitee for compensation for a loss. Indemnification clauses are usually product- or circumstance-specific and apply to only one party, as the indemnitee waives the right to sue the indemnitee, but the indemnitee does not waive its right to sue the indemnitee. The compensation process may take some time, but you will be compensated. If you provide compensation, it may be essential to provide adequate liability protection to enable you to do business with the other party. With respect to the example above, if you were the contractor in the situation, unless you were willing to pay compensation for possible future liability, the company that wants to have their office renovated may not be willing to hire you for the work. Let`s look at an example that can help you see the difference more clearly. For example, if you use tax preparation software, the company providing the program will usually also provide you with compensation for tax penalties resulting from the incorrect calculation of your tax liability in the software. In addition to compensation for any loss, the Software Company may also guarantee that by using the Software, you will be entitled to the highest possible legal refund. Indemnification is a legal agreement by one party to hold another party harmless – not liable – for possible loss or damage.

It is similar to a disclaimer, but it is usually more specific and only applies to certain points, circumstances or situations, or in relation to a specific contract. When an indemnification provision is triggered, one party pays the other party`s costs, judgments, settlements, attorneys` fees, costs and penalties. We hope you enjoyed CFI`s statement on remuneration. CFI is the official provider of the global Financial Modeling & Valuation Analyst (FMVA) certification program, ™ designed to help anyone become a world-class financial analyst. The following CFI resources are helpful in furthering your financial education: Whether you are providing or receiving compensation, you should always carefully review indemnification clauses to ensure that they adequately address legitimate concerns and business risks, but are also fair and equitable to all parties involved. As a former CEO of a pharmaceutical tool manufacturer, Liz gained first-hand experience overcoming the challenges associated with running and growing a start-up. Liz uses her startup experience to address legal issues from a business perspective. A common example of compensation is insurance transactions. This often happens when, under an individual`s insurance policy, an insurance company agrees to compensate the insured person for losses incurred by the insured person as a result of an accident or property damage. In this type of agreement, Party A would bind insurance company B.

If Party A and Party C are involved in an incident that results in property damage or bodily injury (e.g. a car accident), Insurance Company B assumes any liability for which Party A may be liable. After that, insurance company B would usually sue Part C for damages. In compensation for the loss of their slaves, owners received on average about one-third of their value. It is important to both parties involved that any indemnification agreement be clearly stated and apply only to specific and reasonable circumstances or situations. Indemnification clauses that are too broad or too broad can lead to problems. For example, a company that rents machinery may not want to be sued if someone is injured while using the machines. What are the words that share a radical element or word with compensation? Black`s Law Dictionary defines „indemnify“ as an act that creates „a Party A obligation“ to „recover any loss, damage or liability of Party B.“ The basic concept of compensation is „compensation“ – through compensation, Part A undertakes to indemnify Part B for possible loss or damage. Is compensation used correctly in the next sentence? If you were on the other side of the transaction, the company that hired the remodel, without the renovator providing you with compensation, you may be exposing your business to undue financial risk. Contract Counsel – The Indemnification Clause (Part 3)One indemnifying party essentially acts as an insurance company for the other party.