Indemnification clause A contract provision requiring one party to reimburse another for losses, damages, or legal costs arising from specified events, such as injuries connected to construction work or a leased property.
Indemnification is how NYC owners recover money after paying a sidewalk claim that a tenant or contractor should have prevented: the clause obligates that party, and often its insurer, to cover the judgment and defense costs. Because the sidewalk duty is non-delegable, the injured pedestrian still collects from the owner first, and the indemnity fight happens afterward. New York law limits clauses that indemnify a party for its own negligence in construction settings, so wording matters. Pairing the clause with an additional insured requirement on the contractor's policy gives the protection real teeth.
Frequently Asked Questions About Indemnification clause
What is an indemnification clause?
A contract provision requiring one party to reimburse another for losses, damages and legal costs arising from specified events, such as injuries connected to construction work or a leased property.
How is it different from a hold harmless clause?
Hold harmless is a promise not to pursue the other party. Indemnification is an affirmative promise to pay defense costs and judgments. The two are often combined in one paragraph.
Does indemnity mean the owner avoids being sued?
No. Because the sidewalk duty is non-delegable, the injured pedestrian collects from the owner first, and the indemnity claim is pursued afterward.
Are there limits in New York?
Yes. New York law restricts clauses that indemnify a party for its own negligence in construction settings, so wording matters and should be reviewed by counsel.
What strengthens an indemnity clause?
Requiring the contractor to name the owner as an additional insured on its liability policy, so an insurer stands behind the promise.