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Liability Indemnity Agreement for the United Kingdom

Liability Indemnity Agreement Template for England and Wales

A Liability Indemnity Agreement under English and Welsh law is a legally binding contract where one party (the indemnitor) agrees to protect another party (the indemnitee) against specified losses, damages, or legal liabilities. This agreement outlines the scope of protection, claim procedures, and conditions under which the indemnity applies. It is governed by English and Welsh contract law principles and relevant statutory provisions, including the Contracts (Rights of Third Parties) Act 1999 and the Unfair Contract Terms Act 1977.

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Liability Indemnity Agreement

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What is a Liability Indemnity Agreement?

The Liability Indemnity Agreement is commonly used in business transactions where parties need to allocate risk and establish clear responsibilities for potential losses or legal claims. This document becomes particularly important in scenarios involving complex commercial relationships, professional services, or situations with significant potential liability exposure. Under English and Welsh law, these agreements must carefully balance the interests of both parties while ensuring compliance with statutory requirements and common law principles. The agreement typically includes detailed provisions on the scope of indemnification, claims procedures, and any limitations or exclusions.

What sections should be included in a Liability Indemnity Agreement?

1. Parties: Identification and details of all parties to the agreement

2. Background: Context and purpose of the indemnity agreement

3. Definitions: Key terms used throughout the agreement

4. Scope of Indemnity: Precise description of what losses/liabilities are covered

5. Duration: Time period for which the indemnity remains valid

6. Claims Procedure: Process for making and handling indemnity claims

7. Governing Law: Specification of applicable law and jurisdiction

What sections are optional to include in a Liability Indemnity Agreement?

1. Insurance Requirements: Specifies required insurance coverage to be maintained by the parties

2. Limitations on Liability: Caps or restrictions on indemnity obligations and maximum liability amounts

3. Third Party Rights: Provisions governing the rights of third parties under the agreement

4. Dispute Resolution: Alternative dispute resolution procedures and escalation mechanisms

What schedules should be included in a Liability Indemnity Agreement?

1. Schedule of Covered Claims: Detailed list of specific claims or types of claims covered under the indemnity

2. Insurance Requirements Schedule: Detailed insurance specifications including types of coverage, minimum amounts, and deductibles

3. Claims Handling Procedures: Detailed step-by-step procedures for processing and managing indemnity claims

4. Excluded Losses: Comprehensive list of specific losses or circumstances excluded from the indemnity coverage

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Document Type

Liability Waiver

Sector

Sales

Cost

Free to use
Relevant legal definitions






























Clauses






























Industries

Contracts (Rights of Third Parties) Act 1999: Key legislation governing third party rights to enforce terms of the indemnity agreement. Essential for determining the scope of who can enforce the indemnity provisions.

Unfair Contract Terms Act 1977 (UCTA): Fundamental legislation controlling the use and enforceability of exclusion and limitation clauses. Particularly important as it restricts the ability to exclude liability for death or personal injury.

Consumer Rights Act 2015: Legislation setting out fairness requirements and transparency obligations for consumer contracts. Relevant if the indemnity agreement involves consumers.

Hadley v Baxendale Principles: Common law principles establishing rules for remoteness of damage and recoverability of losses in contract law.

Limitation Act 1980: Statute establishing time limits for bringing claims and determining when causes of action accrue. Critical for enforcement of indemnity rights.

Civil Liability (Contribution) Act 1978: Legislation governing rights of contribution between parties, particularly relevant for multiple party indemnity arrangements.

Companies Act 2006: Corporate legislation relevant when parties to the indemnity are companies, particularly regarding their capacity to enter into indemnity agreements.

Financial Services and Markets Act 2000: Regulatory framework applicable when the indemnity relates to regulated financial activities or financial services.

Misrepresentation Act 1967: Legislation governing pre-contractual statements and representations, which may affect the validity and interpretation of the indemnity agreement.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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