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Administrative and Support Services · NAICS 561 · Indemnification Agreement
An indemnification agreement is a risk-allocation contract that protects your administrative or support services business from financial loss due to claims arising from your services. Whether you run a staffing agency, janitorial company, security service, or other NAICS 561 business, you face unique liability risks: temporary employees injuring themselves on client premises, cleaning chemicals damaging property, or security guards accused of misconduct. This agreement clearly defines who is responsible for what, helping you avoid costly litigation and insurance disputes. It is essential for managing relationships with clients, subcontractors, and vendors, and for ensuring that your insurance coverage aligns with your contractual obligations.
Broad indemnification requires the indemnitor to cover all claims, even those caused by the indemnitee's own negligence, except for gross negligence or willful misconduct. Standard indemnification only covers claims arising from the indemnitor's negligence. Many states limit broad indemnity in construction or property contexts, so choose carefully.
Often, a standalone agreement is used to clarify scope or when the duty is owed to a third party, like a client's property owner. It can also be used when the indemnity is a condition of a separate contract, such as a subcontractor agreement.
Your insurance policies, like general liability and workers' comp, may cover some indemnity obligations. This agreement typically requires you to maintain certain insurance and name the indemnitee as an additional insured. Always review your policies to ensure they cover the contractual liability you assume.
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