What Is Indemnification?
Indemnification is a contractual obligation in which one party (the indemnitor) agrees to compensate another party (the indemnitee) for specified losses, damages, liabilities, or expenses. In Florida, indemnification clauses are fundamental components of real estate contracts, construction agreements, commercial leases, and business transactions.
Key Elements of an Indemnification Clause
- Covered claims: Types of losses triggering the obligation (third-party lawsuits, government fines, property damage, personal injury)
- Scope of losses: Direct damages, defense costs, attorney fees, settlements, judgments
- Limitations: Liability caps, deductibles, exclusions for specific loss types
- Procedures: Notice requirements, right to control the defense, consent to settlement
- Survival: Whether the obligation continues after contract termination or closing
Florida Construction Anti-Indemnity Statute
Section 725.06, Florida Statutes voids construction contract clauses requiring indemnification for the indemnitee’s own negligence:
- A subcontractor cannot indemnify a GC for the GC’s own negligence
- A GC cannot indemnify an owner for the owner’s own negligence
- Indemnification is limited to the indemnitor’s proportionate fault
- Self-negligence indemnification remains valid (a party can agree to cover its own negligence)
Real Estate Applications
- Purchase agreements: Seller indemnifies buyer for pre-closing liabilities (environmental, undisclosed defects, unpaid liens)
- Commercial leases: Tenant indemnifies landlord for premises liability
- Management agreements: Manager indemnifies owner for management negligence
- Title insurance: Title company indemnifies insured against covered title defects
Related Terms
- Contract — Agreement creating obligations
- Liability — Legal responsibility for losses
- Hold Harmless — Related contractual protection
- Insurance — Risk transfer mechanism
Barnes Walker Contract Services
Barnes Walker’s attorneys draft, negotiate, and enforce indemnification provisions in real estate, construction, and business contracts throughout Southwest Florida. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC