Indemnification Clauses
by Daniel Steven

Q.  My publishing contract provides that I “indemnify and hold harmless” my publisher from all claims.  That sounds drastic.

                A.  It is.  Unfortunately, indemnification and warranty clauses in book contracts frequently are skimmed over and not fully understood by authors, agents, or editors.  These clauses set forth the respective responsibilities of the parties in the event of claims against the author and publisher for defamation, copyright infringement, invasion of privacy, violation of rights of publicity, and other “torts,” or civil wrongs.  Drafted by the publisher’s lawyers, they often are overbroad and publisher-slanted to a ludicrous degree.

     In general, the warranty clause is the author’s promise to the publisher that her work is original, and further does not defame (libel) any individual, nor invade anyone’s right of privacy or right of publicity. To give this promise teeth, the publisher also includes an indemnification clause, which is the author’s agreement to reimburse the publisher for any damages suffered by the publisher if the author’s warranties are false. This is required even though all but the smallest publishers carry “publisher’s perils” insurance policies that will cover the publisher for such claims.

    What can you do about it?  Ideally, you should get the following underlined words inserted in the standard indemnification clause: “The Author will indemnify the Publisher against any loss, injury, or damage (including any legal costs or expenses and any compensation costs and disbursements paid by the Publisher) occasioned to the Publisher in connection with or in consequence or any breach of the Author’s warranties and which the Publisher is not able to recover under its insurance policies.”  In most cases, this will dramatically reduce your potential liability.

      Unless you are a best-selling author, however, it can be difficult to get this change: Many publishers and editors treat their indemnification clauses as sacrosanct, handed down, Moses-like, from “Legal.”  There are some changes, however, to which many publishers will agree.  Most successful authors should be able to get their publisher to make them an “additional insured” on the publisher’s insurance policy.  This means that the author, as well as the publisher, are covered by the publisher’s insurance policy.  In that case, unless your actions were intentional, the most you could be personally liable for in the event of a lawsuit would be a share of the insurance policy’s deductible amount (typically, not more than $10,000).

      Other realistic requests you can make: 1) ask that a “best of your knowledge” standard be added to your warranties.  This will protect you from inadvertent errors or omissions.  2) Ask that your indemnities take effect only upon a final judgment -- insert the words “finally sustained” after the word “damage” in the above sample clause.  By doing so, you will ensure that you will not have to pay the cost of frivolous lawsuits.  3) Ask that your publisher be required to give you notice of any claim and consult with you before settling any claim.