Indemnity clause in Contract

Indemnity clause in Contract, in simple words, is a promise by one Party to other Party that they will indemnify (*code: DICH) (defend, indemnify and hold harmless) the other Party if there is a loss (*Code: CDELL)(damage, liability, loss, expenses and costs) to the other Party arising from breach of Contract by the first Party. 

What claim is covered by Indemnity 

Breach of Contract can injures the other Party in 2 ways. One way is there is a contractual damage, means there is contract claim between two parties that breach of contract has bring damage, liabiity, loss, expenses and costs to other party. ("Contract claim or direct claim between two parties arising of the contract. Another way is a third party damage, means there is a third party claim to the Owner arising out of the breach of the Contract.

Breach of Contract by what

There can be various reasons for a breach of Contract. For instance, 

• if there breach of Contract is associated by "any act or omission", then this is very broad scope of indemnity. 
• if there is a breach of Contract by simple negligence, this is also a broad scope of indemnity as a simple negligence
• if there is a breach of Contract by gross negligence, wilful misconduct or fraud, this is very limited level of indemnity as there is always a intention to injure the other Party.