Indemnity Clause: Risk, Exposure, and What Drafting Differences Cost
By Buddy Broussard, LegalSifter
A contract dispute can stay manageable, or become financially destabilizing. Often, the difference comes down to a single clause.
But some clauses don’t just allocate operational responsibility. They allocate legal responsibility. That’s why the indemnity clause is one of the most negotiated and highest-stakes provisions in modern contracting.
Indemnification is often where contractual risk becomes litigation risk. It determines who must step in, and pay, when a third-party claim arises. Defense costs alone can become substantial, even before liability is established.
World Commerce & Contracting’s annual research on the most negotiated contract terms consistently reinforces that risk allocation clauses like indemnity remain central negotiation priorities.
