AI Indemnification
Contractual protection where one party agrees to compensate another for AI-related losses.
Definition
AI Indemnification clauses allocate responsibility for AI-related losses between contracting parties. These provisions have become critical in AI vendor contracts, licensing agreements, and service agreements.
Key considerations:
- Scope: What AI-related claims trigger indemnification (IP infringement, discrimination, data breaches)
- Carve-outs: Exceptions for customer modifications, misuse, or prohibited uses
- Caps: Limitations on indemnification liability
- Process: Notice requirements and control of defense
Major AI providers have introduced specific indemnification programs (e.g., Microsoft's Copilot Copyright Commitment, Google's generative AI indemnification) covering IP claims arising from AI outputs.
Sources
- •Contract Law
- •Liability Allocation
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