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Legal Brief
By the
Legal Dept.
Practical advice based on BL’s policies and procedures as well
as things that might be helpful in your life outside BL.
Indemnification
- that nasty clause
in a client-written contract that the
Legal Department is always harping
on. What does it mean? What are the
risks?
Simply speaking, indemnification is
the agreement to assume a specific
liability in the event of a loss. It
may mean a shifting of risk from one
party to another. When a consultant
indemnifies a client, the consultant
may be taking on a client’s actual or
potential legal liabilities.
When a contractor assumes control
of an owner’s property and occupies
it for the purpose of constructing
something on it, it’s reasonable to ask
the contractor to hold the owner of
the property harmless from liability
for anything that happens on the
site. The same logic does not apply to
architects, engineers, environmental
scientists or land surveyors.
Consultants do not occupy or exercise
constructive control over the jobsite.
Instead they are providing professional
and rather intangible services for the
benefit of a client and it makes no
sense for them to have to provide the
same protection as a contractor.
Safe to say, I could take up the entire
Owners’ Manual with the ins and
outs of indemnification language but I
doubt any of you would want to read
it. Here’s the bottom line and what
we are insured for –
Consultant agrees, to the fullest
extent permitted by law, to indemnify
and hold harmless the Client against
damages, liabilities and costs arising
from the negligent acts, errors or
omissions of the Consultant in the
performance of the professional
services under this Agreement.
Note what words you are NOT
seeing – “defend”, “claims, suits”,
“except for the sole negligence of
the client”, etc. etc. As always, the
Legal Department must review any
client-drafted contract before signing.
We welcome any and all questions
regarding indemnification and if people
are interested, would be happy to do
a Lunch with Legal just on contract
language.