What does an uncapped indemnity clause mean?

Contract makes you indemnify the client for 'all claims'? Learn what uncapped indemnity means for freelancers and use a fair cap tied to fees paid.

The risky clause

Contractor shall indemnify Client against all claims, damages and legal fees of any kind, with no cap.

Why it is dangerous

Indemnity means you cover the client's losses. With no cap and no limits on type of claim, one dispute could cost far more than the project paid. Standard protections are a cap equal to fees paid, a carve-out for indirect losses, and indemnity only for claims arising from your own breach or negligence. This is general information, not legal advice.

Safer clause to propose

Contractor's total liability, including any indemnity, shall not exceed the fees paid in the 12 months before the claim. Neither party is liable for indirect or consequential losses.

Message to send

Hi [Client],

Could we cap my liability, including indemnity, at the fees paid under this agreement and exclude indirect losses? This is standard for freelance work. Thanks, [Your Name]

Frequently asked questions

What is an indemnity clause?

It is a promise to cover another party's losses or legal costs in certain situations. Scope and cap matter a lot.

What is a reasonable liability cap for freelancers?

Fees paid under the contract is a common cap. Ask for it to include indemnities.

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