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An Indemnification Agreement is a protective measure that shields businesses from financial and legal liabilities. If your company enters into contracts with third parties, vendors, or contractors, this agreement ensures that any damages, claims, or legal fees are handled by the responsible party. For instance, in a supplier agreement, the supplier may agree to indemnify your company against defective products. By including an Indemnification Agreement in contracts, businesses reduce the risk of unexpected expenses and lawsuits. A well-drafted Indemnification Agreement defines the scope of indemnity, setting clear boundaries for liability and protection.