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Indemnity is basically explained and classified in three forms as follows:

Broad Form indemnification, Intermediate Form Indemnification and Limited Indemnification.

  • Broad Form Indemnity
    Broad Form Indemnity requires one party to assume the obligation to pay for another party’s liability even though that other party is solely at fault. One of the key indicators an indemnity agreement is Broad Form is the inclusion of the phrase “caused in whole or in part.” One of the most common examples of a claim scenario where Broad Form Indemnity could come into play is when injured employees sue an employer to get an additional pay out beyond workers’ compensation benefits. Injured employees are barred from suing their employer if workers’ compensation insurance has been provided, so they sue the owner alleging that the owner was 100% negligent and caused their injury. The owner of the project is going to argue that they were not 100% at fault and they will tender the claim back to you. Since the employee’s allegation is that the owner is solely at fault, a Broad Form Indemnity would be required to respond to the owner’s tender of the claim to you. Unfortunately, determining liability can be a long and costly process, especially without coverage for Broad Form Indemnity.
  • Intermediate Form Indemnity
    Intermediate Form indemnifies a party for its own negligence, except if that party is solely at fault. A key indicator an indemnity agreement is Intermediate Form is the inclusion of the phrase “caused in part.”
    The omission of the word “whole” is what keeps this from being Broad Form, and what is left being covered is the partial negligence of the party seeking indemnity. Granted, partial negligence can be as much as 99%.
  • Limited Form Indemnity
    Limited Form is not really indemnity at all since it does not indemnify a party for its own negligence. The key phrase to look out for with Limited Form is “only to the extent.”



In simple terms, an indemnity policy is an insurance policy to cover a defect relating to property. Such policies are commonly used to cover against the cost implications of third party making a claim against the defects. The policy last for many years. The exact length of this will depend on the insurer. A direct question of who pays for an indemnity policy- a seller usually pays for the policy to savage sale. But if the seller refuses to pay, you will have to negotiate over the covers of the cost. The policy covers a legal defect with the property that either cant be resolved or would be very costly and or time consuming to do so. So, instead of trying to fix the problem you simply take out indemnity insurance to protect you against an expensive bill in future.

An indemnity insurance policy is transferable to any successive owners, but the property owner may need to increase the insured sum if the property owner increase in value.

The process of policy takes places as a result of how insurers will work to tight deadlines in order to minimize the commercial impact of the transaction, however, from initial indicative offering from policy inception a minimum period of around 7 days is required and typically will be up to 2 to 3 weeks.

It is important to also note that if you do not have protection (professional indemnity insurance) then you could be liable for any costs relating to claim made against you. This could include legal costs and compensation because the professional indemnity (PI) is designed to protect business owners, freelancers and self-employed if clients claim a service is inadequate. Any professional service or gives advice could be sued if recipient is unhappy with their work.

Do you have any further questions? feel free to call Ibejulekkilawyer on 08034869295 or send a mail to and we shall respond accordingly.

Disclaimer: The above is for information purposes only and should not be construed as legal advice. (blog) shall not be liable to any person(s) for any damage or liability arising whatsoever following the reliance of the information contained herein. Consult us or your legal practitioner for legal advice.

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