indemnitor

An indemnitor is a person or entity that agrees to compensate another party, the indemnitee, for losses, damages, or liabilities arising from a defined set of risks or events. The obligation to indemnify is typically established in an indemnity clause within a contract or in a separate indemnification agreement. The indemnitor's promise is to reimburse or defend the indemnitee against specified claims, costs, or judgments, regardless of fault in some arrangements, or only to the extent defined by the contract.

Indemnity arrangements commonly arise in construction, commercial transactions, licensing, and insurance contexts. The indemnitor may bear primary liability (a primary indemnitor) or may be obligated only if the indemnified party is first required to pay (a secondary or contingent indemnitor). In many agreements, the indemnitor also assumes control of defense and settlement of claims on behalf of the indemnitee, subject to the indemnitee's rights.

Indemnitors differ from insurers and guarantors. An insurer indemnifies the insured under an insurance policy in exchange for premiums; a guarantor typically promises to satisfy the debt if the principal defaults, rather than covering a broader spectrum of losses. The indemnitor's responsibility is limited to the risks defined in the indemnity, though the scope can be broad or narrow and may include defense costs, settlements, and judgments. Subrogation allows the indemnitor to recover payments from third parties responsible for the loss after paying.

Enforceability depends on contract terms and governing law. Indemnity clauses are subject to general contract principles, including limits on liability, exclusions for willful misconduct, and caps on damages. Drafting considerations include defining covered losses, specifying notice and control of defense, and clarifying exclusions and duration.