{"ok":true,"canonical_url":"https://www.capbench.com/glossary/indemnification-agreement","api_url":"https://www.capbench.com/api/public/glossary/indemnification-agreement","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-17","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","CapBench lender and franchise enrichment"],"term":{"slug":"indemnification-agreement","term":"Indemnification agreement","group":"Doing the deal","definition":"A contract where one party agrees to compensate another for certain losses or damages. This protects you from financial repercussions caused by issues arising from the seller's period of ownership.","what_it_means":"This agreement is critical. It defines what the seller will cover if problems emerge post-closing that relate to their time owning the business, like undisclosed liabilities or tax issues. Negotiate indemnification carefully to ensure adequate protection and survival periods.","url":"https://www.capbench.com/glossary/indemnification-agreement","official_sources":[],"related":[{"slug":"escrow-holdback","term":"Escrow / holdback","url":"https://www.capbench.com/glossary/escrow-holdback"},{"slug":"closing-condition","term":"Closing condition","url":"https://www.capbench.com/glossary/closing-condition"},{"slug":"due-diligence","term":"Due diligence","url":"https://www.capbench.com/glossary/due-diligence"},{"slug":"litigation","term":"Litigation","url":"https://www.capbench.com/glossary/litigation"}],"related_questions":[{"question":"What if a franchise agreement contains provisions for indemnification that concern the SBA?","url":"https://www.capbench.com/for-lenders/questions/what-if-a-franchise-agreement-contains-provisions-for-indemnification-that-concern-the-sba"},{"question":"How does life insurance effectively fund a business buy-sell agreement?","url":"https://www.capbench.com/sba-7a/questions/how-does-life-insurance-effectively-fund-a-business-buy-sell-agreement"},{"question":"How does the purchase agreement structure affect an SBA partner buyout?","url":"https://www.capbench.com/sba-7a/questions/how-does-the-purchase-agreement-structure-affect-an-sba-partner-buyout"},{"question":"How does an operating agreement impact an SBA partner buyout loan?","url":"https://www.capbench.com/sba-7a/questions/how-does-an-operating-agreement-impact-an-sba-partner-buyout-loan"},{"question":"What happens if the seller terminates the purchase agreement mid-process?","url":"https://www.capbench.com/sba-7a/questions/what-happens-if-the-seller-terminates-the-purchase-agreement-mid-process"},{"question":"What are the specific conditions for an acceptable full standby agreement?","url":"https://www.capbench.com/for-lenders/questions/what-are-the-specific-conditions-for-an-acceptable-full-standby-agreement"}]},"caveats":["Definitions represent CapBench's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"CapBench Glossary — Indemnification agreement","url":"https://www.capbench.com/glossary/indemnification-agreement","source_type":"CapBench Data"}}