What does cross indemnification mean?

Question

What does cross indemnification mean?

Answer 1

Cross indemnification usually occurs in a contract that states something like this: "Party A agrees to indemnify party B for any losses arising out of Party A's negligence.  Party B agrees to indemnify party A for any losses arising out of Party B's negligence".  This basically turns the issue into a factual matter, generally.  Unfortunately, determining the exact situation also requires review and analysis of things like (1) additional insured status (2) insurance coverage as to the indemnification agreements ("insured contracts" and indemnitee status, if applicable) and (3) enforceability of the indemnification agreement.  For example, in many states, an agreement where a party is said to indemnify a second party for the second party's own negligence is deemed unenforceable as a matter of public policy (statutes most commonly prohibit this in a construction setting, where they exist).  Proper analysis of such situations requires specialized legal and contractual knowledge for the best protection of ones rights, in my professional opinion.

Answer 2

Imagine for a moment that you rent a chainsaw from the local ABC rental company. Since your ability to use a chainsaw safely remains unproven to the ABC rental agent, he may ask you to sign a number of papers. One of those papers might read: "The renter of this equipment agrees to defend, indemnify and hold harmless ABC Rental Company and its staff for any third-party claims which may arise from the use of the equipment." This is considered indemnification, an agreement between two parties not to hold one of them responsible for future legal action or fines. Indemnification usually only works in one direction; you as the renter agree not to hold ABC Rental Company employees responsible if you have an accident with their chainsaw.