Indemnity Clauses in Entertainment Vendor Contracts — What Do They Mean?

When representing entertainment vendors in contract negotiations with movie and television studios, our discussions soon move to the actual specifics of the ATM risk transfer concepts West Corzine, LLP developed. If we address the “A” of ATM, that is “Avoidance of the Risk,” our advice centers on the concept of “indemnity.” When an indemnity clause is included in an entertainment vendor contract, the lessee or renter agrees to both defend (pay an attorney to represent you in a lawsuit) and indemnify (pay a settlement or judgment of a suit) you (your company and its agents and employees) from any and all claims. This provision is key. Without it, you will have to pay defense and indemnity costs any time your renter / lessee is sued. The other important part of the standard indemnity clause is the “sole negligence or willful act” section. This particular language allows the renter or lessee to take as much liability from you as possible without becoming an insurance company. With this phrase included, the renter / lessee agrees to accept any and all liability you may have for claims arising out of the rental or lease, except to the extent the harm was caused solely by you. Certainly, anyone can be sued, but this clause decreases the probability of a suit and reduces your time in them.