The California Indemnity Agreement is a legally binding document that establishes the mutual understanding and protection between a corporation and its directors, officers, employees, and agents. This agreement ensures that these individuals are indemnified against any losses, damages, liabilities, and expenses incurred while acting in their official capacity or in the best interest of the corporation. The purpose of the California Indemnity Agreement is to provide financial security to directors, officers, employees, and agents for potential claims, lawsuits, or legal actions arising out of their corporate duties. It also assures them that the corporation will bear the costs associated with defending such claims, including attorney fees, settlements, and judgments. This indemnity agreement applies to various scenarios and situations, including but not limited to: 1. Directors Indemnification: This type of indemnification agreement specifically focuses on protecting the corporation's directors. It safeguards them from personal liability resulting from their actions or decisions made on behalf of the corporation. It covers board meetings, decision-making processes, and other responsibilities involved in directing the corporation's affairs. 2. Officers Indemnification: This category of indemnity agreement is designed to safeguard the corporation's officers, such as the CEO, CFO, COO, and other high-level executives. It ensures that officers are protected from personal liability arising from their official actions or decisions taken in the best interest of the corporation. 3. Employees Indemnification: This type of indemnity agreement safeguards the corporation's employees who may face potential legal actions while performing their job responsibilities. It applies to the corporation's regular employees and covers actions taken within the scope of their employment. 4. Agents Indemnification: Agents, including consultants, contractors, or other external parties acting on behalf of the corporation, can be protected under this indemnity agreement. It ensures that agents are indemnified for any legal claims resulting from their authorized actions or services rendered for the corporation. The California Indemnity Agreement is drafted in accordance with relevant state laws, particularly the California Corporations Code, which outlines the rights and obligations of the parties involved. It is vital for both the corporation and the individuals covered under the agreement to thoroughly understand its terms, limitations, and conditions to ensure proper protection. Consulting legal professionals experienced in corporate law is highly recommended ensuring compliance with all legal requirements and to craft an agreement specific to the corporation's needs.
California Indemnity Agreement between corporation and directors officers employees and agents of corporation
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FAQ
While generally, indemnity contracts for negligence are enforceable, the strict rule of construction in California is that indemnity for active negligence requires explicit language in the clause that negligence of the indemnitee is to be included.
California's long-standing anti-indemnity laws prohibit a public agency from forcing a contractor to indemnify the agency for its "active negligence." That prohibition has now been expanded in new and amended anti-indemnity statutes, which protect subcontractors and suppliers of goods and services (not just contractors ...
Generally, hold harmless agreements are enforceable in California if they are specific. They protect one party to an agreement from the other party's demands for compensation. In California, they must include specific and explicit language regarding which risks are covered.
Insurance ? The indemnification agreement typically will require that the company provide D&O liability insurance that protects the indemnitee to the same extent as the most favorably insured of the company's and its affiliates' current directors and officers.
Indemnification of Employee. Employer shall indemnify Employee and hold him harmless for lawful acts or decisions made by him in good faith while performing his duties for Employer, its parent, subsidiaries and affiliates to the full extent allowed by law.
Under Section 317, subdivision (b), California corporations have the power to indemnify any person who was or is a party or is threatened to be made a party (other than an action by or in the right of the corporation to procure a judgment in its favor) by reason of the fact that the person is or was an agent of the ...
An agreement to indemnify a person against an act thereafter to be done, is void, if the act be known by such person at the time of doing it to be unlawful. 2774. An agreement to indemnify a person against an act already done, is valid, even though the act was known to be wrongful, unless it was a felony. 2775.
By statute, you cannot have another party indemnify you against damages that result your sole negligent or willful acts. If such a clause is in a contract it is void. Thus under California law, the person seeking indemnity from the other party must have some degree of fault for the harm that results in the liability.