Indemnification is a legal concept that involves one party compensating another for specified losses or damages. It is commonly found in commercial contracts and serves to shift liability from one party to another. An indemnification clause outlines the conditions and circumstances under which the indemnifying party will compensate the indemnified party for financial harm or loss, typically arising from third-party claims. This clause is heavily negotiated and can be essential for risk allocation and protection in contractual agreements
. The term "to indemnify" means to compensate someone for harm or loss, and it is often formalized in written agreements, such as insurance policies, where one party promises to compensate the other for specified damages or losses related to an incident or event
