We have all come across this concept (or is it a term?) before, but now, let’s take the time to really understand this. Over the next few posts in this series, we’ll take a dive into the indemnification pool (pun intended) and break down the useful definitions and considerations to give you enough to have a conversation and lead you into more in-depth research.
In fact, Indemnification Caps (“Caps”) are essential to both buyers and sellers and draw on expertise from litigators and deal lawyers. Are they worth it? You bet, a botched indemnification negotiation could negate the entire value of the deal you just closed. Is it tricky? As you’ll see, the negotiators have their own language.
Let’s start with a broad definition that we can refer back to throughout the series: What is an Indemnification Cap?