Generally, when one agrees to indemnify another party, they are agreeing to reimburse them for an anticipated loss. Frequently in contracting, the drafter of the contract seeks to shift liability for an anticipated risk from the party performing the work to the party obtaining the benefit of the work. This can be problematic for homeowners associations; as such an indemnity provision may not be covered by the association’s insurance policy. Therefore, prior to entering into any contract which requires the association to indemnify any other party, the association should review this obligation with its legal counsel and insurance provider.

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