Indemnification

I’m hearing/reading lots of photographers having hissy-fits about indemnification. The timing is perfect since it is something we have been talking about a lot in my Licensing class.

[NOTE: This is just my opinion and NOT legal advice. I’m not a lawyer! Work with your own IP lawyer to get the best answers to your important questions.]

Yes, I said “hissy-fits.” People are getting their knickers in a twist rather than looking at the actual issues involved and trying to find a reasonable solution. Just saying “no” is not reasonable. Panicking about possibly having to pay for anything and everything is not reasonable.

Let me explain…

Indemnification is kind of like insurance or a guarantee. For the issuer (the photog in our situation), it is essentially saying, in very general terms, “I promise that my image doesn’t infringe on anyone’s copyright or trademark (or whatever) and if it does, I will pay up.” It is NOT saying that if the client or agency gets sued for any reason your ass is on the line. It means that if they get sued (for the claims described in the clause, usually © or ® infringement) and the other party wins, you will pay the agency what they had to pay to the winner.

Of course, if the clause doesn’t limit the scope to, for example, infringement claims, that is something you’d need to negotiate and change, but we’ll get there in a sec…

First off, almost every license contract in business has some sort of indemnification clause. It’s logical: if A licenses something from B, A shouldn’t be held legally responsible for the errors B makes. You wouldn’t expect to be held responsible for an accident caused by a car with manufacturing defects, right? The car company should pay for their mistakes. Same basic idea. So there is no reason to flip out about indemnity.

There is even more reason not to flip out: you can negotiate the terms of the indemnification clause. You can say, for example, that you will only indemnify US claims and then only up to the amount of the licensing fee for the image. That way, you would only be on the hook for the fees you got for the license of that image and only for US suits (that can be a big deal, btw). That makes sense– it’s like a money-back guarantee.

And if you do your job well and get the proper permissions, you should not have any issue of infringement anyway, so the clause would not likely ever get invoked–that is, your client will not likely be sued for anything about your image and so there will be nothing to pay up for anyway.

For you, as a businessperson, the issue is one of risk– how much risk is there that you are making infringing images? How much are you willing to bet on that? How much are you willing to put on the line for this one project where the client wants an indemnification?

Then, ask yourself (or better yet, your lawyer) how can you structure the clause so both your interests and your clients interests are satisfied?

And don’t forget that you can (and arguably should) get indemnified by your clients if they insist, for example, you use a certain ® product when you can’t get a release. They should indemnify you if you get sued. See, makes sense when you see it from the other side, doesn’t it? For example, I wouldn’t shoot an ad with a Barbie® in it, without  a release from Mattel, without getting indemnified by the client or agency. Mattel protects her big-time.

Think about being fair and reasonable; think about your client’s issues; and there is usually a reasonable solution. Here, it is to negotiate a fair and reasonable clause and to shoot the gig. 🙂