Are Indemnification Obligations Consequential Damages?

The most common carve-outs from a consequential damage disclaimer are as follows: Third party indemnification claims. ... However, a claim by a third party (and the defense of such claim) is likely to be classified as a consequential damage as to the indemnified party.

Are indemnification obligations direct damages?

An indemnification provision for direct claims typically covers damages relating to the indemnifying party's acts, omissions, or breach of the agreement. Third-party claims. These are claims that a third party has against the indemnified party, which parties most commonly use indemnification to cover.

What is an example of consequential damages?

Commonly, consequential damages include property damage, personal injury, attorneys' fee, lost profits, loss of use, liability of buyer to customers, loss of goodwill, interest on money withheld by customers, and damages related to third party claims.