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Indemnity Clause

An indemnity clause is a contract provision in which one party agrees to cover another party's losses or liability. The Insurance Bureau of Canada defines indemnity as "to provide compensation for loss or expenses incurred." IRMI explains that in contracts, one party takes on financial responsibility for another's liability, commonly through hold harmless agreements.

Why It Matters for Snow Contractors

Many commercial snow contracts include one. The usual direction is that the contractor indemnifies the property owner or manager for claims arising from the contractor's work. The wording decides how far that goes: only your own negligence, shared fault, or broader claims.

IRMI notes that additional insured status is often paired with indemnity agreements. Together they are how a client moves snow and ice risk toward the contractor and the contractor's insurer.

Your general liability policy may or may not respond to every liability you take on by contract. A broker can review the clause against your policy, and a lawyer can advise on the wording.

Example

A condo contract requires you to indemnify the corporation "for all claims arising out of the performance of the services." A resident falls on a walkway you cleared that morning and sues the corporation. Under the clause, the corporation may ask you, and through you your insurer, to cover its defence and any payment.

General information only, not insurance or legal advice. Policy wordings differ; a licensed broker can explain how your own policy and contracts treat this.

Further reading: Insurance Bureau of Canada: Insurance glossary; Insurance Bureau of Canada: Types of business insurance coverage

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Frequently Asked Questions

Is an indemnity clause the same as insurance?

No. It is a contractual promise. Insurance may help you meet it, depending on your policy.

Can indemnity clauses be negotiated?

Often, yes. Many contractors ask for wording limited to their own negligence. A lawyer can advise.