What this is
What is an indemnity and contract record?
What is an indemnity and contract record?
It captures the commercial and legal terms of a signed contractor agreement outside the contract itself: who indemnifies whom, whether the cap is realistic, whether insurance backs the indemnity, and what the safety and food safety obligations require. It exists so the terms that matter after an incident can be found without re-reading the contract.
Who should complete it?
Procurement, with legal input on the indemnity, cap and governing law fields, from someone who has read the clauses rather than confirmed a review happened upstream.
When does it get completed?
Before work begins, once the contract is signed. A record raised after work starts is reconstructing terms from memory, and the cap amount and indemnity direction are exactly the fields people misremember.
Scope
When is an indemnity and contract record required?
This record documents the terms of a signed contract. It is not a substitute for the specific insurance and safety records alongside it in the same programme, and it is not a legal opinion.
Use this template when
- A contractor agreement has been negotiated and is ready for signature, or has just been signed
- The contract sets out indemnity, liability or safety obligations that need checking against exposure before signature
- A renewal or amendment changes the indemnity direction, the cap, or the safety obligations
- Legal or procurement needs a single place to find what the contract says without re-reading it
- The onboarding programme requires this record as its contractual gate before work starts
Do not use it for
- Confirming the contractor holds valid insurance certificates, which belongs on the Insurance Certificate Record
- Checking coverage limits match the risk of the work, the Insurance Adequacy Review's job
- Confirming workers compensation standing, a distinct clearance with its own evidence
- Assessing the method or risk of the work itself, which belongs to the method statement review
- Recording day-to-day performance against the contract, which belongs on the scorecard and review records
Compliance mapping
Which Contract law requirements does this satisfy?
Contract law does not prescribe an indemnity structure; it enforces whatever the parties agreed, subject to limits jurisdictions place on excluding liability for death, injury or negligence. The record captures the negotiated position against those limits.
| Clause | Requirement | Where it lands |
|---|---|---|
| Indemnification clause | States which party indemnifies the other, for what losses, and whether the obligation is mutual or one-directional | Indemnity |
| Limitation of liability clause | Sets a cap on recoverable loss, assessed against realistic exposure rather than contract value | Indemnity |
| Carve-out for death, personal injury and wilful default | Excludes specified categories of loss from the general cap, consistent with what most jurisdictions enforce anyway | Indemnity |
| Insurance backing clause | Requires the indemnifying party to carry insurance sufficient to meet the indemnity given | Indemnity |
| Governing law and dispute resolution clause | Names the law governing the contract and the process for resolving a dispute under it | Indemnity |
| Health and safety compliance and right-of-audit clause | Incorporates site rules, permit compliance and incident reporting, preserves the right to audit records, and to remove individuals or suspend work | Safety obligations |
| Product liability and recall clause | Addresses liability for product loss caused by the contractor, including GMP and food-grade materials obligations | Food safety obligations |
What it does not cover
- Insurance Certificate Record, which holds the contractor's actual certificates and expiry dates rather than the contractual promise to carry them.
- Insurance Adequacy Review, which checks the coverage held matches the risk of the specific work, a judgement this record does not make.
- Workers Compensation Clearance, which confirms standing with the relevant authority and is not addressed by the indemnity clause.
- Contractor Method Statement Review, which assesses how the work will be done, separate from what the contract says about liability for it.
- External legal advice on an unusual or high-value contract, since this record captures the negotiated position, not a legal opinion on enforceability.
Global
Indemnity and Contract Record requirements by country
Contract terms are set by the parties, but each jurisdiction places different limits on what an indemnity or cap can actually exclude, which determines whether the negotiated position holds up in practice.
State contract law; anti-indemnity statutes in construction
Freedom of contract is broad, but several states void indemnity clauses requiring a party to indemnify another for that party's own negligence, particularly in construction.
A cap that looks enforceable on its face can be void by statute in the specific state and sector, so governing law and the nature of the work both matter.
Unfair Contract Terms Act 1977; common law on indemnities
A clause excluding liability for death or injury caused by negligence is void outright; other exclusions must satisfy a reasonableness test.
The carve-out for death and injury is not a drafting nicety here; it reflects a limit the clause cannot contract around.
National civil codes; Unfair Contract Terms Directive
Civil law jurisdictions generally apply good faith to interpretation and are more willing to read down an onerous exclusion than common law courts.
A cap drafted for a common law jurisdiction may read differently under a civil code, which matters when governing law is left blank.
How to complete it
How to complete an indemnity and contract record, step by step
The record is straightforward to fill in as yes-or-no confirmations. The judgement that makes it useful sits in three fields: the cap against exposure, the indemnity direction, and whether insurance actually backs it.
A cap is reasonable or not relative to the realistic loss, and that needs an actual exposure figure, such as the value of product at risk in a recall, set against the cap amount. Recording the cap without that comparison answers an easier, less useful question.
A mutual indemnity clause reads evenly but is rarely symmetric in effect, because the parties rarely face symmetric risk. Answering this field means reading what each party is actually indemnifying the other against, not noting that the word mutual appears.
An indemnity backed by insurance that excludes the relevant loss, or has a limit below the cap, is not backed at all. That is a different question from whether a certificate of insurance exists, and it is the one this record is asking.
A clause referencing the site handbook is enforceable only if the handbook is incorporated as a schedule; referencing it in passing is a courtesy. The safety fields should reflect which of the two actually happened.
What auditors find
Most common indemnity and contract record findings
The findings below concern the substance of the terms captured, not whether the record was filled in. A completed record with a hollow cap or an unbacked indemnity documents a false sense of security.
| Finding | Clause | What fixes it |
|---|---|---|
| Liability cap set at or near the contract value while realistic exposure is materially larger. | Limitation of liability clause | Benchmark the cap against a stated exposure figure, not the contract value, and record the comparison. |
| Indemnity recorded as mutual without reading which party carries the greater exposure in substance. | Indemnification clause | Have legal confirm the practical effect of the mutual clause, not just its label. |
| Indemnity given by a contractor whose insurance does not cover the risk or is below the cap. | Insurance backing clause | Cross-check the certificate against the indemnified risk and the cap amount. |
| No carve-out recorded for death, personal injury or wilful misconduct. | Carve-out for death, personal injury and wilful default | Require the carve-out as a condition of signature; several jurisdictions will not enforce a cap over these losses regardless. |
| Safety obligations referenced by pointer to a site handbook rather than incorporated into the contract. | Health and safety compliance clause | Attach the handbook as a contractual schedule, or write the specific obligations into the clause itself. |
| Record filed before the second signature or legal review is actually in place. | Contract execution | Hold the second signature and legal review as a gate before the contract start date is entered. |
Case in point
Case in point: the cap that matched the contract, not the loss
A food manufacturer engaged a refrigeration contractor under a service agreement with a liability cap set at the annual contract value, a routine drafting choice procurement had used on every contractor agreement for years. The indemnity was mutual, insurance was confirmed held, and the record was signed off with every field marked yes.
A refrigeration failure caused a multi-day temperature excursion across a chilled storage area, resulting in a product write-off worth several times the contract value. The indemnity clause covered the loss in principle, but the cap limited recovery to a fraction of it, and the shortfall sat with the manufacturer regardless of what the indemnity said.
The template
The template, field by field
The form exactly as it installs. Every field, option, score and conditional rule is editable, and the links to other templates come with it.
5 sections
- Reference
- CON-024
- Archetype
- Record
- Record ID
- IND-2026-000
- Scoring
- Not scored
- Direction
- n/a
- Singleton
- No
- Basis
- Contract law
- Links
- Links Vendor
- Tags
- Contractor, Legal
- Sections
- 5
- Fields
- 45
- Follow up fields
- 0
- Repeating sections
- 0
- Links out
- 2
Header
15 fieldsRecord ID*
Auto sequence. Format IND-2026-000.
The record's own ID. Other templates point at this value.
Status*
Drives who this goes to next.
- Planned2 pts
- In progress2 pts
- Complete3 pts
- Deferred0 pts
- Open0 pts
- Closed3 pts
- Overdue0 pts
Date and Time*
Completed By*
Site*
Site ID*
Format SITE-000.
Links to FDN-001 Site ID
Contractor*
Vendor ID*
Format VEN-0000.
Links to FDN-005 Vendor ID
Written Beats Understood
Verbal agreements about who carries which risk are worthless when something happens. This record captures what the contract actually says, in plain terms.
Contract Reference*
Contract Type*
Contract Value
Contract Start*
Contract End*
Legal Review Completed*
- Yes3 pts
- Partly1 pt
- No0 pts
Safety obligations
9 fieldsSafety Requirements Written In*
- Yes3 pts
- Partly1 pt
- No0 pts
Site Rules Incorporated*
- Yes3 pts
- Referenced2 pts
- No0 pts
Permit Compliance Required*
- Yes3 pts
- No0 pts
Incident Reporting Obligation*
- Yes, with timescale3 pts
- Yes, vague1 pt
- No0 pts
Right To Audit Included*
Without a written right to audit, a contractor can refuse you access to their records.
- Yes3 pts
- No0 pts
Right To Remove Individuals*
- Yes3 pts
- No0 pts
Right To Suspend Or Terminate For Safety*
- Yes3 pts
- No0 pts
Subcontractor Approval Required*
- Yes3 pts
- No0 pts
Insurance Requirements Specified*
- Yes, with limits3 pts
- Vague1 pt
- No0 pts
Food safety obligations
3 fieldsGMP Compliance Required*
- Yes3 pts
- No0 pts
Food Grade Materials Required*
- Yes3 pts
- No0 pts
Liability For Product Loss Addressed*
A contractor causing a recall can generate losses far beyond their contract value. Address it explicitly.
- Yes3 pts
- Partly1 pt
- No0 pts
Indemnity
9 fieldsIndemnity Clause Present*
- Yes3 pts
- No0 pts
Indemnity Direction*
Who indemnifies whom, and for what. Mutual indemnities are common and need reading carefully.
- They indemnify us3 pts
- Mutual2 pts
- We indemnify them0 pts
Cap On Liability*
- No cap3 pts
- Cap above exposure2 pts
- Cap below exposure0 pts
Cap Amount
Cap Reasonable Versus Exposure*
A liability cap at the contract value is meaningless if the potential loss is a hundred times larger.
- Yes3 pts
- Marginal1 pt
- No0 pts
Carve Outs For Death Or Injury*
- Yes3 pts
- No0 pts
Insurance Backs The Indemnity*
An indemnity from a company with no assets and no insurance is a piece of paper.
- Yes3 pts
- Partly1 pt
- No0 pts
Governing Law Specified
- Yes3 pts
- No0 pts
Dispute Process Specified
- Yes3 pts
- No0 pts
Outcome
9 fieldsTerms Acceptable*
- Yes3 pts
- With amendments1 pt
- No0 pts
Amendments Sought
Signed Copy Held
Contract Owner Briefed On Terms*
- Yes3 pts
- No0 pts
Review Date*
Contract Owner*
Signature*
Legal Or Procurement*
Second Signature*
CON-024 · record IDs look like IND-2026-000 · Links Vendor
Open in KnowellaRun it with agents
From a document you fill in to a programme that runs itself
The contract is fixed once signed. What moves afterwards is whether its terms are known when needed, and by then the person who negotiated it may not be the one answering the question.
Holds the indemnity and contract record against the vendor register, flags contracts with a missing or weak cap, insurance backing or carve-out, and surfaces the terms without a search through the signed file.
Links the contract record to the vendor's approval status and insurance evidence, so a lapsed certificate or an expired contract surfaces against the same vendor.
Cross-checks the safety obligations written into the contract against the site's actual permit and incident reporting requirements, flagging a clause referencing a handbook nobody attached.
Holds the contract owner briefing and review date open until confirmed, and raises the record for re-review when a renewal or amendment changes the indemnity terms.
This template lives in KnowContractor — contractor management. Prequalification, approval, induction, permits and performance.
Meet KnowContractor→Glossary
Indemnity and Contract Record definitions and key terms
- Indemnity
- A contractual promise by one party to compensate the other for a specified loss, distinct from a general duty to perform with care.
- Limitation of liability (cap)
- A negotiated ceiling on the amount recoverable under the contract, which only functions as a control if set against realistic exposure.
- Carve-out
- A category of loss, typically death, personal injury or wilful default, excluded from a general cap or exclusion clause.
- Governing law
- The law the parties have agreed will interpret the contract, which can materially change how an indemnity or cap is enforced.
- Right of audit
- A contractual right to inspect the other party's records relevant to the agreement, which does not exist unless written in.
FAQ
Frequently asked questions about indemnity and contract record
Does a mutual indemnity clause mean the risk is shared evenly?+
Not necessarily. A mutual clause obliges each party to indemnify the other for losses it causes, but the parties rarely face symmetric risk. A contractor indemnifying a manufacturer for a product recall, and the manufacturer indemnifying the contractor for site access, are not equivalent exposures even though the clause reads evenly.
What makes a liability cap adequate?+
That it is set against a realistic figure for the loss the contract exposes you to, not the contract value. A cap at the contract value is common because it is easy to justify commercially, and inadequate for exactly that reason when the realistic exposure, a recall or a shutdown, is far larger.
Why does it matter whether insurance backs the indemnity?+
An indemnity is only as valuable as the indemnifying party's ability to pay it. Insurance excluding the relevant risk, a limit below the cap, or a contractor with no material assets all leave the indemnity as a paper promise regardless of how strongly it is drafted.
Do we need a carve-out for death and injury if the law already protects it?+
Recording it explicitly is still worthwhile. Several jurisdictions void caps over death and injury by operation of law, but relying on that without checking governing law leaves the position unclear, and the record exists to capture what was actually agreed.
Who should review the indemnity and cap terms?+
Legal, working from the actual clause text rather than a summary. Procurement can confirm the commercial and safety terms, but indemnity direction, cap adequacy and carve-outs need a legal reading, since their effect depends on drafting nuance the fields alone cannot capture.
What happens if the contract is silent on governing law?+
A dispute turns on conflict-of-laws rules to determine which jurisdiction applies, slower and less certain than naming one. A blank field usually means it was blank in the contract too, worth escalating before signature.
Keep going
Related templates and programmes
Industries this is written for
Programmes this belongs to
Used together in Contractor Onboarding and Management
Contractor Prequalification Questionnaire
Collects a contractor's safety, insurance, training and performance information before they are approved
Contractor Safety Statistics Review
Reviews a contractor's injury rates, citations and experience modifier over recent years
Contractor Risk Classification
Classifies a contractor by the risk of the work they do, from low risk services to high risk construction
Contractor Approval Record
Records the decision to approve a contractor to work on site
Contractor Safety Program Review
Reviews the contractor's own written safety programme against your requirements
Subcontractor Declaration
Records any subcontractors a contractor intends to use
More in Insurance
Insurance Certificate Record
Holds the contractor's insurance certificates with coverage amounts and expiry dates
Workers Compensation Clearance
Confirms the contractor is in good standing with the workers compensation authority
Insurance Adequacy Review
Checks that coverage limits and types match the risk of the work being done
Insurance Expiry Review
Reviews contractor insurance due to expire in the coming period
Written and reviewed by
Siddarth Singh
Founder & Chief Executive Officer, Knowella
Certified Safety Professional and industrial and systems engineer with more than a decade inside food supply chain, freight and manufacturing operations. This page was written against the current text of the standards it cites, not against secondary summaries of them.
- Certified Safety Professional (CSP), Board of Certified Safety Professionals
- MBA, University of Chicago Booth School of Business
- MS and BS, The Ohio State University, Industrial and Systems Engineering
- Six Sigma Black Belt
Sources and last review. Reviewed 16 August 2026 against:
- Unfair Contract Terms Act 1977 (UK) on exclusion and limitation clauses
- State anti-indemnity statutes applicable to construction and service contracts (US)
- UNIDROIT Principles of International Commercial Contracts, general provisions on limitation of liability
This page is general guidance, not legal advice. Confirm requirements with your jurisdiction’s regulator.