An indemnity is a contractual promise to meet a defined category of loss or liability. In a business sale, it may allocate an identified risk between buyer and seller.
The wording determines what triggers the obligation, which losses are covered and what conditions or limits apply. An indemnity does not automatically sit outside every cap, time limit or other protection in the agreement.
Consider the trigger, the covered loss, any exclusions, the cap, the claim period and control of third-party claims. Review the indemnity together with the agreement’s wider liability provisions.