The New York Indemnity Agreement is a legal document that outlines the terms and conditions of indemnification between a corporation and its directors, officers, employees, and agents. This agreement aims to protect these individuals from liabilities and legal expenses they may incur while acting within their roles within the corporation. Here is a detailed description of what the New York Indemnity Agreement entails: Scope and Purpose: The New York Indemnity Agreement is designed to safeguard the directors, officers, employees, and agents of a corporation, by providing them with essential legal protections in the event they face legal actions arising from their corporate duties. This agreement ensures that individuals who act in good faith, within the bounds of their authority, and in the best interest of the corporation, are shielded from personal liability for their actions. Coverage and Indemnification: The agreement defines the extent of indemnification, covering legal costs, judgments, settlements, fines, penalties, and even expenses incurred in the defense of legal proceedings. It ensures that directors, officers, employees, and agents are reimbursed for expenses reasonably incurred in connection with their legal defense. The agreement also allows for advances, where the corporation may provide timely funding for legal expenses before a final determination of their obligations is reached. Types of New York Indemnity Agreements: 1. Director Indemnity Agreement: This particular agreement focuses solely on providing indemnification protections to directors of the corporation. It outlines the terms and conditions under which directors are entitled to indemnification from the corporation and defines the limits of such indemnification. 2. Officer Indemnity Agreement: This type of New York Indemnity Agreement is specific to officers within the corporation. It clarifies the rights and obligations of the officers in regard to indemnification and delineates the agreed-upon parameters for their protection. 3. Employee Indemnity Agreement: This agreement pertains to the employees of the corporation, offering indemnification provisions against legal claims stemming from their employment-related activities. It outlines the conditions under which employees will be protected and reimbursed for any legal expenses incurred. 4. Agent Indemnity Agreement: This agreement extends indemnification to agents of the corporation who act on behalf of the organization. It ensures that agents are adequately covered and indemnified when faced with legal actions during the course of their agency duties. Conclusion: The New York Indemnity Agreement encompasses various types of agreements specifically tailored for corporations, directors, officers, employees, and agents. Its primary purpose is to provide essential protection for individuals acting in their corporate capacity, shielding them from personal liability and mitigating potential financial risks. These agreements serve as a vital tool in fostering a secure business environment, where individuals are encouraged to act diligently and in the best interest of the corporation without fear of personal liabilities.
New York Indemnity Agreement between corporation and directors officers employees and agents of corporation
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FAQ
Forty-three states have some form of law which prohibits a construction contract that requires a subcontractor to indemnify another party for its negligence (but some of these states limit the application of the law, for example, only to public projects).
Indemnification is often very broad, often extending ?to the maximum extent permitted by law?, whereas D&O insurance polices contain numerous exclusions and conditions. In addition, D&O insurance must be renewed each year, with possible changes in terms and conditions.
Under New York law, quasi-contractual obligations are imposed by law, where there has been no agreement by the parties, to assure a just and equitable result. Common law indemnification typically applies when, by operation of law, one is held responsible for another's actions due to their relationship.
States enacted them to fight an imbalance of negotiating power between upstream and downstream entities. They protect indemnitors from taking on more than their fair share of the risk. Anti-indemnity legislation largely targets the construction industry with 45 states having statutes.
Indemnification is, generally speaking, a reimbursement by a company of its Ds&Os for expenses or losses they have incurred in connection with litigation or other proceedings relating to their service to the company.
A director and officer indemnification agreement is a contract that allows executives to protect themselves from claims made against them while performing job. Indemnification means that in the event a lawsuit is filed against a company, the indemnified party is "held harmless" from claims.
Both New York and New Jersey have anti-indemnity statutes restricting the extent to which a party can be indemnified for its own negligence. Under New Jersey law, an indemnification agreement will not be enforced when it requires indemnification for the indemnitee's sole negligence pursuant to NJSA 2A 40-1.
Are indemnification clauses enforceable? Indemnification clauses are generally enforceable, but there are important qualifications. Some courts hold that broad form or ?no fault? indemnifications, which are blind to fault on the part of either party, violate public policy.