This form provides boilerplate contract clauses that restrict or limit the dollar exposure of any indemnity under the contract agreement. Several different language options are included to suit individual needs and circumstances.
Connecticut Indemnity Provisions are contractual clauses that outline the extent of financial liability one party assumes for potential losses, damages, or claims incurred by the other party. These provisions typically include considerations for baskets, caps, and ceilings, which play a crucial role in determining the dollar exposure of the indemnity. Baskets refer to thresholds that must be exceeded before an indemnifying party becomes responsible for covering losses or claims. They are designed to protect the indemnifying party from assuming minor or immaterial losses, allowing them to focus on more significant financial impacts. Connecticut Indemnity Provisions may feature various types of baskets, such as: 1. DE Minims Basket: This type of basket sets a minimal monetary threshold for identifiable losses. Any claims below this threshold are disregarded, ensuring that only substantial claims are included in the indemnity calculations. 2. Time-Based Basket: In certain cases, a Connecticut Indemnity Provision might include a basket requirement based on time. This means that the indemnifying party assumes no liability for losses occurring prior to a specific date, even if they exceed the monetary threshold. Caps represent the maximum amount of liability the indemnifying party may endure. Once the cumulative losses or claims reach this predefined cap, the indemnifying party is no longer obligated to cover any additional expenses. By implementing a cap, the parties can limit potential exposure to catastrophic risks. Ceilings are similar to caps, but they are typically applied to individual claims or per occurrence instead of cumulative losses. In other words, the ceiling sets a maximum indemnity amount for each separate loss or claim. Once that ceiling is reached, the indemnifying party is no longer required to provide coverage. Connecticut Indemnity Provisions — Dollar Exposure of the Indemnity regarding Baskets, Caps, and Ceilings ensure fair distribution of financial risks between contracting parties. These provisions protect the indemnifying party from assuming insignificant losses while establishing clear limits on potential exposure. By employing different types of baskets, caps, and ceilings, companies can tailor their indemnity agreements to suit their specific needs and risk tolerance.
