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Gabe R. from New York asked

What does indemnification mean?


Ask The Experts - Providing insight for commonly asked transition-related questions

Today's topic: What does indemnification mean?

Indemnification refers to the legal obligation of one party (the indemnitor) to compensate or protect another party (the indemnitee) from certain losses, damages, liabilities, or
expenses incurred as a result of specified events, actions, or circumstances.

The purpose of indemnification, is to shift or allocate the financial burden or risk associated with certain events or circumstances from the indemnitee to the indemnitor. 

By way of example, in a dental transition, it protects the buyer, from all liabilities and expenses which occurred prior to the sale, and protects the seller, from all liabilities and expenses occurring after the sale.

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