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Indemnification Clause Drafter for Contracts
An indemnity fitted to your deal and your side, matched to the liability cap, or a plain reading of what your current clause covers.
River drafts an indemnification clause for the deal in front of you. Share the agreement, its current indemnity, or a short description of the deal, and tell River whose side you are on. River decides who should cover which claims, writes the defense and settlement procedure, and lines the indemnity up with the limitation of liability so the two sections do not contradict each other. Each drafting choice comes with a short note on why it was made and how the other side is likely to respond.
Most sample clauses online are one mutual paragraph promising to indemnify, defend and hold harmless against any claim arising out of the agreement. That wording reaches far further than most parties intend and leaves the real questions unanswered: whether it covers disputes between the two parties or only claims by outsiders, who runs the defense, and whether it sits under the cap. River answers those for your deal, and can also read an existing clause back to you in plain language.
This is for founders, contract managers and lawyers negotiating software, services, supply and partnership agreements, especially when the other side's paper asks for an uncapped indemnity no insurer would cover. Published standard forms, like the cloud service agreement in River's library, keep their terms intact; negotiated changes go on the cover page or in a contract amendment. For a whole contract review rather than one clause, use the vendor contract legal review. Delays from events outside anyone's control belong in a separate force majeure clause.
What an indemnity really allocates
An indemnity moves the cost of certain losses from one party to the other. Its core job is third-party claims. If a customer is sued because the vendor's software infringes someone's patent, the vendor defends the suit and pays the result. Clauses get into trouble when they stretch to any claim arising out of the agreement, which can turn an ordinary dispute between the two parties into a promise to pay the other side's legal bills.
Courts often resist that stretch. New York's highest court held in Hooper Associates v. AGS Computers (1989) that an indemnity covers fees in a suit between the parties only where that intent is unmistakably clear, a test the Appellate Division applied again in 2023. Under Texas's express negligence rule, a party is indemnified for its own negligence only if the clause says so expressly and conspicuously, as Texas A&M's Real Estate Center explains. Most states also limit indemnities in construction contracts by statute, so a template clause can fail exactly where it matters.
Here is an illustrative example. A vendor licensing scheduling software to a hospital group can sensibly cover claims that its code infringes intellectual property and claims caused by its own data security breach, with its usual exclusions for customer modifications and combinations. It should not cover claims caused by the hospital's staff. The infringement indemnity often sits outside the general cap, while the data breach indemnity may sit under a separate, higher cap backed by the vendor's insurance.
How it works
Share the contract
Paste the agreement or its indemnity section, or explain the deal, and tell River whose side you take.
River maps the risk
It works out which outside claims each party controls, then checks the cap and the governing law.
Get the clause
The indemnity in contract form with drafting notes, or a plain reading of the clause you have.
Negotiate in chat
Request the counterparty's probable markup, a compromise position, or matching edits to the liability cap.
What you get
- An indemnity section fitted to your deal and side, inserted where it belongs in the agreement
- Covered claims named specifically, with third-party claims kept separate from disputes between the parties
- Defense, notice, cooperation and settlement consent terms that say who controls the case
- IP infringement cover with standard exclusions and the vendor's options to modify, replace or refund
- The indemnity and the limitation of liability checked together, so caps and carve-outs agree
- Drafting notes on each choice, the likely pushback, and a fallback you could accept
Common questions
What is the difference between indemnify, defend and hold harmless?
To indemnify is to pay covered losses. To defend is to take on and pay for the defense of a covered claim as soon as it is made, often before anyone knows who is right, which can matter more. Hold harmless is usually treated as meaning the same as indemnify, though a few courts read it more broadly, so define the terms.
Should indemnity be capped?
It depends on the claim. Many deals leave IP infringement indemnities and claims for gross negligence or willful misconduct outside the general cap, and put data breach indemnities under a separate, higher cap that matches insurance. An uncapped indemnity for any claim arising out of the agreement is a bet the company cannot price, and it is usually worth pushing back.
Should indemnities always be mutual?
Not automatically. Each party should cover the risks it controls. A vendor controls whether its product infringes and how it secures data, while a customer controls its own data, content and use of the product. Mutual wording that hides one-sided coverage helps nobody, so list the claims each party covers.
Does an indemnity cover lawsuits between the two of us?
Usually that is not its purpose, and some courts will not read it that way unless the contract says so very clearly. New York's highest court required unmistakably clear language before reading an indemnity to cover legal fees in a suit between the parties. If you want fee shifting between the parties, write a separate attorney fees clause.
Who controls the defense of a claim?
Usually the indemnifying party, since it is paying. The clause should require prompt notice, let the indemnified party join with its own counsel at its own cost, and bar settlements that admit fault for the indemnified party or impose obligations on it without its consent. Late notice should reduce cover only to the extent it caused prejudice.
How does insurance fit in?
An indemnity is only as good as the money behind it. Check that the indemnifying party carries insurance that responds to the claims it is taking on, such as general liability, professional liability, or cyber cover for data breaches, and consider requiring that coverage in the contract. Insurers also review indemnities, so ask your broker before agreeing to anything unusual.
Sources
Built by
Chandler Supple
Co-founder & CEO, River
Chandler has spent the last six years working in AI, building tools for millions of users and Fortune 100 companies. In 2025, he co-founded River to build a new kind of operating system for AI agents.
Indemnification Clause Drafter for Contracts
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