A provision in a contract whereby one party (the indemnifying party) agrees to hold another party (the indemnified party) harmless, and sometimes even defend altogether that party, if the indemnified party is sued or penalized because of the indemnifying party’s actions or omissions.

For example, let’s assume a general contractor is the indemnified party and its electrical sub-contractor is the indemnifying party. If, through the fault of the electrical sub-contractor, the general contractor is sued by a homeowner for a faulty installation, then the indemnification provision would require the electrical to either hold the general contractor harmless for any losses it incurs or, if drafted to require it, to defend the lawsuit altogether from the outset.