Risk Management Continuing Ed. Parties can agree by contract to allocate the risk between them. Risk may be shifted entirely from one party to another. An indemnification clause is often used for this purpose. There are typically three parts to an indemnity clause.
Indemnity clauses fall into three groupings.
Broad form indemnity , as its name implies, requires the consultant to indemnify its client for all damages arising out of the project whether caused by the consultant, a third party, or even the client. Refer to the discussion in this book on Standard of Care for an explanation concerning negligence based liability. You are not legally liable for every act, error, and omission. This language can be deceptively subtle. Courts interpret it to mean that if the consultant contributed even just a little bit to causing the damages, it will be required to indemnify the client for ALL of the damages, including those caused by the client's negligence.