Indemnification

A contract clause where one party agrees to cover specified damages or claims brought against the other.

In SaaS contracts, the vendor typically indemnifies the buyer for third-party intellectual property claims (someone sues claiming the vendor''s software infringes their patent). The buyer typically indemnifies the vendor for buyer-side data, content, or end-user actions. Strong indemnity clauses are uncapped or carved out from the overall liability cap; weak indemnity clauses are limited by the same cap as everything else, which often leaves the buyer underprotected.