Why the Right to Defend Matters in Indemnification Clauses

What the indemnification "defend" language means

Indemnification clauses identify whether the indemnifying party has the right and obligation to defend against covered claims. If the claim is included, the indemnifying party has to step up on day one and take over the costs and responsibilities for defending those claims.

I used to think defense obligations were something to avoid in indemnification provisions

 When I was a newer attorney, I thought of defense as only an obligation and an unfair one at that.

"You mean my client has to pay hundreds of thousands of dollars to defend a lawsuit to which it isn't even named and with no finding of fault? What?"

When my client was the indemnifying party, I drafted to get them out of it. I'd add limits that only required my client to reimburse for the defense costs only after a finding of my client's fault.

What I've learned over the years is that the indemnifying party in many situations wants to defend the action.

Indemnification claims defense is a right and obligation

It is a right to defend, not just an obligation.

The indemnifying party will have to pay any damages and has the best incentive to vigorously and efficiently defend the action. This mindset is especially true when the indemnifying party's intellectual property is at issue.

So I no longer focus on getting out of the defense obligation. Instead, I make sure my client has control. It gets to decide the case strategy, including whether to settle or appeal.

Other Resources to Learn About Indemnification Defense

• How to Contract Resources
  • Indemnification Provision Learning Hub
  • Indemnification Essentials and Mastery Courses
• Other Blog Articles
  • Morgan Lewis's blog post on "Indemnify, Defend, and Hold Harmless: What Does It Really Mean"
  • Williams and Connoly's presentation on "Defense and Indemnification Provisions: Lessons Learned from Litigation."