When negotiating an employment agreement, an executive may want to negotiate the inclusion of an indemnification provision.

Under a typical indemnification provision, the employer agrees to indemnify the executive against lawsuits, claims, or demands against the employee resulting from the employee’s good faith performance of his or her duties and obligations. The employer also usually agrees to pay all costs and expenses associated with defending the legal action, including attorneys’ fees.

In many situations, the indemnification clause survives after the person’s employment ceases. Some conditions may apply. For example, the employee may be required to immediately notify the employer of any claim against him or her, or obtain the employer’s consent before settling a claim.

For more information, read Why Executives Should Negotiate an Indemnity Clause into Employment Agreements or contact us for assistance in the negotiation and drafting of an employment agreement.