What is a contract of indemnification?

A contract of indemnification is a contract in which one party agrees to protect and compensate the other party for damages or losses that may occur in the course of performing a contract. The most common form of indemnification is commonly referred to as a “hold harmless” clause. This clause is often included in a contract between two parties in order to protect one of the parties from any losses the other party may suffer. In Texas, this type of indemnification contract is legally binding, and the party that has agreed to hold the other harmless is responsible for any losses that may result from their own negligence or wrong-doing. Thus, the party who holds the other harmless must assume responsibility for any losses the other party may suffer and compensate them accordingly. It is important to note, however, that a contract of indemnification is not the same as an insurance policy; the former is an agreement between two parties, while the latter is a third-party protection.

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What is a contract of indemnification?

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