The Importance of Indemnification Provisions in Software License Agreements

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by | October 9, 2014

It may be obvious that software publishers and their customers need protections related to use of the software. What may not be as intuitive to the end users is that they must review the indemnification and limitation of liability sections in license agreements to ensure that these provisions will cover the parties’ complete relationship, not merely the use of the software products.

It is not uncommon for publishers to place indemnification provisions in the boilerplate license agreement requiring licensee to defend any claims and hold licensor harmless for any claims raised by a third party related to licensee’s use of the software. It is not as common for the publisher to include any requirement that it indemnify the licensee.

When a license agreement does contain an indemnification provision related to the licensor, the provision is typically limited to third-party claims against the licensee that the use of the software constitutes intellectual property infringement.

It is critical for the parties to insist on mutual indemnification provisions. End users should also strongly consider the ramifications of all types of claims and include additional protections designed to cover likely outcomes.



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