3. Gregory L. Dillion
Newmeyer&Dillion LLP
Andy Miller
Clyde & Co US LLP
Debra R. Puebla
Sinnott, Puebla, Champagne &Curet, APLC
Brian DeSoto
Great American Insurance Group
4.
What’s the point of indemnity agreements?
◦ Allocate loss
◦ Share (or shift) pain
◦ Protect the party to be indemnified – the
“indemnitee” – against specified liability
5. Developer designs and sells automated litigation calendaring software for
law firms. Firm, a customer of Developer, purchases the software from
Developer.
Owing to a design flaw, Developer’s software incorrectly calendars a
deadline which Firm misses, leading to entry of a default judgment against
Firm’s Client. Client’s retention agreement with Firm specifies that Firm will
employ both manual and automated calendaring systems. Client sues Firm,
which tenders suit to Developer under the Indemnity provision of
Developer’s contract with Firm:
Developer shall indemnify Firm from and against any and all claims to the
extent that they arise out of or are in any way connected with any negligent
act or omission by Developer. Developer agrees, at his own expense, and
upon written request by Firm, to defend any suit, action, or demand brought
against Firm on any matter encompassed by this indemnity
provision. Further, Developer warrants that Firm shall be named as an
insured under Developer’s policies of commercial general liability and
professional liability insurance affording limits of no less than $1 million per
claim, loss, or occurrence.
6. 1.
Is there one?
2.
If so, what does it say?
(a) Who is the indemnitor?
(b) Who is the indemnitee?
(c) What is the scope of the indemnitor’s obligation to defend?
Are there conditions/limitations?
(d) What is the scope of the indemnitor’s obligation to
indemnify? Are there conditions/limitations?
(e) Are there cross-indemnification provisions?
(f) Are there any other risk transfer provisions?
7. 1.
Does the indemnitee have additional
insured rights under the indemnitor’s
primary and/or excess policies?
(a)
(b)
(c)
If so, what are those rights?
Are the rights as an indemnitee greater than
those of an AI?
If the AI carrier defends the indemnitee as an
insured, does it have the ability to share in that
obligation with anyone? Can the indemnitee
simultaneously pursue rights as indemnitee and
AI?
8. 1.
2.
Does it matter if both the indemnitor and the
indemnitee’s direct policies are primary?
Does it matter if the indemnitee is an AI under
indemnitor’s policies?
9.
10.
Gregory L. Dillion
Newmeyer&Dillion LLP
949-854-7000 – greg.dillion@ndlf.com
Andy Miller
Clyde & Co US LLP
415-365-9825 – amiller@clydeco.us
Debra R. Puebla
Sinnott, Puebla, Campagne& Curet, APLC
213-996-4200 – dpuebla@spcclaw.com
Brian DeSoto
Great American Insurance Company
Phone Email