Contract term
Indemnity clause
A contract term where one party agrees to compensate the other for specified losses, sometimes without a cap on the amount.
Indemnities shift risk from one party to another. The key questions are what is covered, whether liability is capped, and whether the obligation is mutual or one-sided.
An uncapped or asymmetric indemnity — where you carry unlimited or disproportionate exposure — is a common red flag.
StartedUp flags uncapped liability and asymmetric indemnities so you can renegotiate before signing.