A service provider indemnity clause is a contractual agreement where the service provider agrees to compensate the client for any losses, damages, or liabilities resulting from the provider's actions or negligence. This provision is designed to protect the client from legal or financial repercussions tied to the service provider's performance.
Service Provider Indemnity. The Service Provider, to the maximum extent permitted by law, shall defend, protect, indemnify and hold the Service Recipients and their officers, employees and directors, as the case may be (“Recipient Indemnified Parties”), harmless from and against any and all losses, demands, damages, liabilities, interest, awards, judgments, settlements and compromises relating to any Third Party claims, actions or causes of action, or suits, and all reasonable attorney’s fees and other fees and expenses in connection therewith (“Losses”) which may be incurred by a Recipient Indemnified Party, arising out of, due to, or in connection with, directly or indirectly, the provision of the Services, except to the extent that such Losses are the result of: a. the combination of the Services with any other product or service; b. any technology, materials, information, directions, or specifications provided by such Recipient Indemnified Party or the performance of the Services in accordance with the foregoing; c. any conduct requested or instructed by such Recipient Indemnified Party; or d. the gross negligence or willful misconduct of such Recipient Indemnified Party.
Service Provider Indemnity. Service Provider shall indemnify, defend and hold harmless Service Recipient, its subsidiaries, and each of their respective Representatives, and each of the successors and assigns of any of the foregoing (collectively, the “Service Recipient Indemnitees”), from and against any and all Losses (that are out-of-pocket and direct) owing to third parties in respect to Third Party Claims, arising out of or resulting from the furnishing of or failure to furnish the Services provided for in this Agreement, but only to the extent that such Losses relate to, arise out of or result from Service Provider’s breach of this Agreement, gross negligence, fraud or willful misconduct. The indemnification obligations set forth in this Section 5.2 are the exclusive indemnification obligations of Service Provider with respect to the matters addressed in this Agreement.
Service Provider Indemnity. Service Provider hereby agrees to RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS the Company Group and the other Company Indemnified Parties from and against any and all Liabilities to the extent arising out of, or relating to the Services, this Agreement or transactions contemplated in this Agreement, solely to the extent such Liabilities are attributable to (a) the gross negligence, willful misconduct, or actual fraud (not constructive or negligent fraud) of Service Provider in the performance of Services during the Term, (b) any claims by Service Provider’s or its Affiliates’ employees or consultants relating to the terms and conditions of their employment or arrangement with Service Provider or such Affiliate and (c) the intentional and willful material breach by a Service Provider Indemnified Party of this Agreement, REGARDLESS OF WHETHER SUCH LIABILITIES ARE THE RESULT OF (IN WHOLE OR IN PART) THE SOLE, ACTIVE, PASSIVE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY, OTHER LEGAL FAULT, LEGAL RESPONSIBILITY, OR THE VIOLATION OF LAW OF OR BY ANY COMPANY INDEMNIFIED PARTIES, SERVICE PROVIDER INDEMNIFIED PARTIES OR ANY THIRD PARTIES; provided, however, that notwithstanding the foregoing, Service Provider shall have no obligation to defend, indemnify, hold harmless or release any Company Indemnified Parties from any Liabilities to the extent such Liabilities arise out of or are related to the gross negligence, willful misconduct, or actual fraud (not constructive or negligent fraud) of the Company Group or any Company Indemnified Party. Notwithstanding any other provision of this Agreement, except solely to the extent such Liabilities are attributable to the willful misconduct or actual fraud (not constructive or negligent fraud) of Service Provider, Service Provider shall in no circumstances be liable to the Company Indemnified Parties pursuant to this Section or otherwise in connection with this Agreement (including, without limitation, in connection with claims related to gross negligence of Service Provider) in excess of the Administrative Fees received by Service Provider from the Company Group pursuant to Section 3.1 during the Term, REGARDLESS OF WHETHER SUCH LIABILITIES ARE THE RESULT OF (IN WHOLE OR IN PART) THE SOLE, ACTIVE, PASSIVE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY, OTHER LEGAL FAULT, LEGAL RESPONSIBILITY, OR THE VIOLATION OF LAW OF OR BY ANY COMPANY INDEMNIFIED PARTIES, SERVICE PROVIDER INDEMNIFIED PARTIES OR ANY THIRD PARTIES.
6.1 Service Provider Indemnity. Subject to Section 7 and in addition to, but not in duplication of, any indemnification obligations under the Separation and Distribution Agreement, Service Provider shall indemnify Service Recipient and its Affiliates and its and their respective officers, directors, employees, partners, managers or persons acting in a similar capacity, agents, consultants, financial and other advisors, accountants, attorneys and other representatives (the “Service Recipient Indemnitees”) in respect of, and hold such Service Recipient Indemnitees harmless from and against, all Losses (other than with respect to Taxes, which are governed exclusively by Sections 3.6 and 3.7) incurred or suffered by Service Recipient Indemnitees relating to, arising out of or resulting from the receipt of the Services only to the extent that such Losses result from the gross negligence or intentional misconduct of Service Provider or any of its Affiliates or any of its or their respective officers, directors or employees in providing any of the Services rendered or to be rendered by or on behalf of Service Provider pursuant to this Agreement.
Section 8.2 Service Provider Indemnity. Service Provider shall indemnify, defend and hold Recipient, Recipient’s Affiliates and their respective Representatives harmless from and against any and all Losses resulting from any Claims to the extent such Losses are caused by Service Provider’s (i) violation of any material Applicable Law, (ii) fraud, (iii) willful misconduct or (iv) gross negligence in connection with performing its duties, responsibilities and obligations under this Agreement or breach of Article VI, provided that (a) Recipient notifies Service Provider promptly in writing of the Claim; (b) Service Provider has sole control of the defense and all related settlement negotiations, except that Recipient must provide prior written consent to any settlement that does not expressly and unconditionally release Recipient from all Liabilities with respect to such Claim without prejudice or that would be adverse to Recipient, which consent will not be unreasonably withheld; and (c) Recipient provides Service Provider with all reasonably necessary assistance, information and authority, at Service Provider’s reasonable expense, to perform these duties.
Service Provider Indemnity. The Service Provider will indemnify the Client, its affiliates and its and their respective officers, directors, employees and representatives (each a “Client Indemnitee”) for, and will defend and hold each Client Indemnitee harmless from, all losses, costs, damages and expenses (including reasonable legal fees) incurred by the Client or such person in any action or proceeding between the Service Provider and the Client or between the Client and any third party (including any Investor, or the U.S. Internal Revenue Service or any other competent regulatory, prosecuting, tax or governmental authority in any jurisdiction, domestic or foreign) arising from (a) the willful misconduct, willful misfeasance, bad faith, reckless disregard, fraud or negligence of the Service Provider or any of its Agents in connection with this Agreement and the Services or (b) the breach by the Service Provider of any material representations and warranties included in clauses 9.1 and 9.3 of this Agreement (each referred to as a “Loss”).
13.1 Service Provider Indemnity. Service Provider Contracting Party agrees to defend, hold harmless and indemnify Prudential, its directors, officers, employees, agents and permitted assignees (the "Prudential Indemnified Parties"), from all Losses: 13.1.1 that the Service Provider Resources (or use thereof), infringes, or causes the infringement of, the intellectual property rights of a third party, except to the extent such infringement is a result of: (a) use of the Service Provider Resources by Prudential in contravention of the license granted to Prudential under Section 8; (b) modifications made by Prudential or Prudential Agents other than at the direction of Service Provider; (c) Service Provider complying with instructions or designs required or provided by Prudential where such compliance necessarily would give rise to such infringement; or (d) combination of the Service Provider Resources by Prudential or Prudential Agents with products or systems other than those provided by, or authorized by, Service Provider; 13.1.2 relating to the personal injury, death or tangible property damage of whatsoever nature or kind arising, in whole or in part, out of, as a result of or in connection with the acts or omissions of Service Provider or the Service Provider Agents; 13.1.3 relating to the Service Provider Personnel at a Prudential facility who breach Prudential's security policies for such facility; 13.1.4 relating to any taxes, interest, penalties or other amounts assessed against Prudential that are the obligations of Service Provider pursuant to Section 10.4; 13.1.5 relating to a breach of Section 3.6 or Section 9 by Service Provider; 13.1.6 relating to the inaccuracy, untruthfulness or breach of any representation, warranty or covenant made by Service Provider in Section 11.1; 13.1.7 by a Service Provider Agent, Service Provider Personnel or a third party to whom Service Provider owes a duty or obligation; 13.1.8 relating to any Losses to Prudential as a result of the Services being provided by Service Provider from a shared environment; or 13.1.9 relating to a breach of this Agreement by Service Provider. Service Provider shall indemnify the Prudential Indemnified Parties from any costs reasonably incurred in connection with enforcing this Section 13.1.
5.1 Service Provider Indemnity. Service Provider hereby agrees to RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS Company and the other Company Indemnified Parties from and against any and all Liabilities to the extent arising out of, or relating to the Services, this Agreement or transactions contemplated in this Agreement, solely to the extent such Liabilities are attributable to (a) the gross negligence, willful misconduct, or actual fraud (not constructive or negligent fraud) of Service Provider or (b) any claims by Service Provider’s or its Affiliates’ employees or consultants relating to the terms and conditions of their employment or arrangement with Service Provider or such Affiliate, other than any claims under any written agreement between any such employee or consultant, on the one hand, and any member of the Company Group, on the other hand, regardless of whether such Liabilities in this subpart (b) relate to the Term or to any period prior to the Term, and with regard to the claims and Liabilities described in subparts (a) and (b) above, REGARDLESS OF WHETHER SUCH LIABILITIES ARE THE RESULT OF (IN WHOLE OR IN PART) THE SOLE, ACTIVE, PASSIVE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY, OTHER LEGAL FAULT, LEGAL RESPONSIBILITY, OR THE VIOLATION OF LAW OF OR BY ANY COMPANY INDEMNIFIED PARTIES, SERVICE PROVIDER INDEMNIFIED PARTIES OR ANY THIRD PARTIES; provided, however, that notwithstanding the foregoing, Service Provider shall have no obligation to defend, indemnify, hold harmless or release any Company Indemnified Parties from any Liabilities to the extent such Liabilities arise out of or are related to the gross negligence, willful misconduct, or actual fraud of Company or any Company Indemnified Party. Notwithstanding any other provision of this Agreement, except solely to the extent such Liabilities are attributable to the willful misconduct or actual fraud (not constructive or negligent fraud) of Service Provider, Service Provider shall in no circumstances be liable to the Company
Service provider indemnity is a contractual obligation where the service provider agrees to compensate the client or third parties for certain losses or damages that arise from specific actions, negligence, or failures. This provision is meant to protect the client from potential liabilities and ensure that the service provider takes responsibility for their conduct or performance-related issues.
You should consider using service provider indemnity clauses in a contract when:
When drafting a service provider indemnity clause, consider including the following elements:
Scope of indemnity: Clearly identify what types of losses or damages the indemnity will cover. Specify whether it includes direct, indirect, consequential damages, or all of the above.
Example: “The Service Provider agrees to indemnify and hold harmless the Client from any and all claims, damages, liabilities, costs, and expenses arising out of or in connection with …”
Conditions for claiming indemnity: Outline the conditions under which the indemnity can be claimed, such as notification requirements or deadlines for making claims.
Example: “The indemnified party shall promptly notify the indemnifying party of any claim or potential claim within [insert timeframe] days upon becoming aware of it.”
Exclusions and limitations: State any specific exclusions or limits to the indemnity, such as caps on liability or types of claims not covered.
Example: “This indemnity shall not apply to any losses resulting from the client’s gross negligence or willful misconduct.”
Defense and settlement: Specify which party will control the defense or settlement of any claims and any cooperation obligations.
Example: “The indemnifying party shall have the right to assume control of the defense and settlement of any claim provided they act reasonably and in good faith.”
Service provider indemnity clauses are commonly found in contracts such as:
Using service provider indemnity clauses in these contracts helps to clarify and allocate risk, ensuring that each party is aware of their responsibilities and liabilities.
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