Intermediate Form Indemnity

Overview

Intermediate form indemnity is a middle-ground indemnification approach that falls between broad form and limited form. Under an intermediate form indemnity clause, the indemnitor (typically the vendor or subcontractor) agrees to hold the indemnitee harmless from all claims — including those involving shared fault — but not from claims arising solely from the indemnitee's own negligence.

How It Works

In practice, an intermediate form indemnity clause allocates liability as follows:

• If the vendor is 100% at fault, the vendor pays all damages
• If both parties share fault (even if the vendor is only 1% at fault), the vendor pays the full amount of damages — not just their proportional share
• If the indemnitee is 100% at fault, the vendor has no indemnity obligation

The critical distinction from broad form is the carve-out for the indemnitee's sole negligence. The critical distinction from limited form is that the indemnitor still assumes responsibility for the indemnitee's partial negligence when combined with the indemnitor's own.

This structure is sometimes called "sole negligence" indemnity because the only scenario excluded from the indemnitor's obligation is the indemnitee's sole negligence.

Intermediate form indemnity is the most commonly used and most widely enforceable form of indemnification in U.S. commercial contracts. Most states that restrict broad form indemnity still permit intermediate form clauses.

Compliance Relevance

From a COI compliance perspective, intermediate form indemnity requires robust insurance backing because the vendor may end up paying for losses that are primarily (though not solely) the fault of the certificate holder. Key compliance considerations include:

• Adequate general liability limits: The vendor's coverage must be sufficient to absorb the potentially amplified exposure
• Additional insured endorsements: These should be in place so the indemnitee can access the vendor's policy directly for claims involving shared fault
• Primary and noncontributory: Often required alongside intermediate form indemnity to establish the vendor's policy as first responder
• Contract-insurance alignment: Compliance teams should verify that the insurance program supports the indemnity obligations the vendor has accepted

Understanding which form of indemnity a contract uses is essential for setting accurate insurance requirements during vendor onboarding.