What is the main characteristic of an indemnity clause?

The primary feature of an indemnity clause is that it provides security against financial loss. This means that one party (the indemnifier) agrees to compensate the other party (the indemnified) for certain damages or losses that may arise under the terms of the contract. The clause aims to protect the indemnified party from claims or liabilities that could result in financial hardship, effectively shifting the risk of loss from one party to another.

This characteristic ensures that the indemnified party does not bear the financial burden of unforeseen events that fall within the scope of the indemnity agreement, thereby enhancing the level of security and trust in the contractual relationship. An indemnity clause is essential in various contractual scenarios, including insurance agreements, service contracts, and supplier-buyer relationships, where there's a need for risk management and protection against potential liabilities.