Insurers are now exposed to indemnifying
otherwise uncovered settlements and judgments if they are found to have wrongfully refused to defend a covered claim.
If an indemnifying
party is not a primary obligor to the taxing authority, it should account for the indemnification pursuant to ASC 460, Guarantees (ASC 460), which requires the use of fair value based upon the guidance in ASC 820, Fair Value Measurements and Disclosures (ASC 820).
For example, the court in PepsiCo (15) found that the Delaware indemnification statute does not provide the exclusive means for indemnification but is simply a fall backmeasure that can be completely supplanted by the corporation's bylaws." The court held that the corporation's failure to comply with the statute's provisions did not prevent the corporation from indemnifying
its directors in accordance with the corporation's certificate of incorporation.
* Indemnification associated with fraud, willful misconduct or infringement of another's intellectual property by the indemnifying
"If the Indemnifying
Party shall assume control of the defense of any Third Party Claim in accordance with the above provisions, the Indemnifying
Party shall obtain the prior written consent of the Indemnified Party before entering into any settlement of such Third Party Claim, if the settlement does not expressly and unconditionally release the Indemnified Party from all liabilities and obligations with respect to such Third Party Claim or the settlement imposes injunctive or other equitable relief against the Indemnified Party.
In protecting another party through indemnification, typically the indemnifying
party agrees to pay the legal defense costs necessitated by the claim as well as any ultimate settlement or judgment in court.
The owner should seriously consider indemnifying
the manager for:
This ruling would provide guidance to members who are asked to sign an agreement indemnifying
a client for losses, costs or damages due to client acts.