Indemnification Language

Blame it on your insurance policy; tell them you won't be covered if you sign.

Then show them this PDF

> When you all receive a subconsultant agreement from your clients that contains the word "defend" or "defense" in the indemnification clause do you request that it be stricken from the clause before you will sign the contract? Our Insurance Agent insists that we do this because there is a chance that the word "defense" can be misinterpreted to apply to situations where it is not tied to our negligent errors or omissions (which is only what a PL policy will cover). I am getting a lot of push back from clients on this and was wondering how common it is with other firms/agents.

Most people are going on what they have been told by others is necessary to cover themselves. Striking that word is one approach to the problem of taking on unnecessary liability. Another approach is to explain things to the client like this:

"You want me to indemnify you in case I screw up. That is reasonable. What about problems that arise through no fault of ours? We will indemnify you but will ask that you indemnify us also. Unless we are found professionally negligent, you will indemnify us. Agreed?"

Reasonable clients will see that this mutual approach works to the benefit of both parties. Unreasonable clients are better off being someone else's headache.

Larry P

This is commonly found in contracts. If it is limited to your own negligences, it may be acceptable. When it is tied to my own negligence, I will strike through "including attorney's fees" and put including reasonable attorney's fees. In some contracts, there is no misinterpretation and they are trying to put you on the hook for all defense fees regardless if you are at fault or not. I actually knew of a case where a Client attempted to have the engineer defend a claim that had nothing to do with his involvement in the project. I will walk before I agree to fund a Client's defense fund. I am also reluctant to sign a contract where the indemnifications are not mutual. If you strike through, sign and return to the Client, the terms as modified are in place unless the Client protests. Usually, it get filed and is never thought of again.

Thanks for the PDF, interesting stuff. (if you like reading about insurance)

Yes, thanks Radar, for the link. I am learning a lot more than I had ever wanted to know about this stuff!

Your Insurance Policy will almost certainly not pay the defence costs of other parties. I will not accept this language in a contract.
The first clause I look for in a contract is the indemnification clause, if it is not reciprocal then I assume the offerer is out to take advantage of us. Usually we can work it out but if we can't we part ways.