Why we use indemnity clause

Question

Accepted Answer

Indemnity clause is used to protect one party from financial loss or legal liability caused by the other party.

It transfers the risk of loss from one party to another
It ensures that one party is not held responsible for the actions of the other party
It is commonly used in contracts, especially in high-risk industries such as construction and healthcare
Example: A construction company may include an indemnity clause in a contract with a subcontractor to protect themselves from any financial loss or legal liability caused by the subcontractor's work
Example: A healthcare provider may include an indemnity clause in a contract with a medical device manufacturer to protect themselves from any financial loss or legal liability caused by the use of the device

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