Can my company make me personally liable for company debts?

No. A reasonable indemnification clause applies to your personal negligence or misconduct (e.g., you breach IP law, you commit fraud). It should NOT apply to company-level decisions, regulatory fines, or third-party claims arising from company operations.

What is mutual indemnification?

Both you and the company indemnify each other. This is fairer. Push for: "Company indemnifies employee for actions taken within scope of employment. Employee indemnifies company only for employee's gross negligence or willful misconduct."

Should indemnification be capped?

Yes. Push for: "Indemnification is capped at employee's annual salary" or "Indemnification is covered by insurance." Without a cap, you could be personally liable for millions in regulatory fines.

Can my company make me personally liable for company debts?

No. A reasonable indemnification clause applies to your personal negligence or misconduct (e.g., you breach IP law, you commit fraud). It should NOT apply to company-level decisions, regulatory fines, or third-party claims arising from company operations.

What is mutual indemnification?

Both you and the company indemnify each other. This is fairer. Push for: "Company indemnifies employee for actions taken within scope of employment. Employee indemnifies company only for employee's gross negligence or willful misconduct."

Should indemnification be capped?

Yes. Push for: "Indemnification is capped at employee's annual salary" or "Indemnification is covered by insurance." Without a cap, you could be personally liable for millions in regulatory fines.

AI Contract Analysis

Indemnification Clause — Who Pays If Things Go Wrong

Indemnification clauses require you to reimburse the company for losses caused by your actions (or inaction). An overreaching indemnification clause could make you personally liable for: regulatory fines, customer lawsuits, IP infringement, or business decisions you didn't make alone. Our AI analyzes indemnification scope and flags clauses that inappropriately shift company risk to you.

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What Our AI Covers

Indemnification scope definition (your actions vs company actions)
Personal liability vs company liability
Regulatory fines and third-party liability
Insurance and indemnification cap
Carve-outs for company negligence or misconduct
Mutual indemnification fairness

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Indemnification Clause Review — Frequently Asked Questions

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