Draft an indemnity trigger and scope that reimburses a clearly defined loss rather than an open-ended promise.
Law & Contract Management
Indemnities, Liability Caps and Consequential Loss Exclusions
Learn to draft indemnities, structure liability caps and write consequential loss exclusions that actually exclude loss of profit when a claim is tested.
🗓️Duration5 training days
📚Content4 modules · 8 sessions
🎓On completionAccredited attendance certificate
About the programme
Course Overview
Liability clauses are where a contract's real risk allocation is decided, yet indemnities, caps and consequential loss exclusions are often drafted from a template and only tested for the first time when a claim is already in dispute. This course works through each mechanism in depth. Participants learn to draft an indemnity trigger and scope so it reimburses a clearly defined loss, and to distinguish an indemnity from an ordinary damages claim that must satisfy mitigation and remoteness tests. Sessions cover cap mechanics, including aggregate annual limits, multiples of fees, per-claim baskets and the carve-outs, such as fraud, death, personal injury and intellectual property infringement, that commercial parties typically leave uncapped. The course gives close attention to consequential loss, explaining why courts have read the term narrowly and why an exclusion clause must name loss of profit, revenue, business and goodwill expressly to have the effect a business assumes it has. The final sessions bring indemnities, caps and exclusions together on one table so participants can spot where clauses conflict, check insurance limits against the accepted cap, and build a negotiation position for the liability package as a whole.
Expected Learning Outcomes
Distinguish an indemnity claim from an ordinary damages claim subject to mitigation and remoteness.
Structure a liability cap using aggregate limits, per-claim baskets or a multiple of fees paid.
Negotiate carve-outs from a liability cap for fraud, death, personal injury and intellectual property infringement.
Explain why courts read 'consequential loss' narrowly and draft exclusions that name loss of profit expressly.
Map indemnities, caps and exclusions onto one table to find where liability clauses conflict.
Check insurance limits and net contribution clauses against the liability cap a party has accepted.
Who Should Attend
In-house counsel negotiating liability, indemnity and limitation clauses in commercial contracts.
Commercial and sales leaders who approve liability caps and carve-outs during contract negotiation.
Risk and insurance managers checking that policy limits match contractual liability exposure.
Private practice lawyers advising on indemnity and limitation of liability drafting.
Procurement professionals negotiating supplier liability caps and consequential loss exclusions.
Contract managers assessing liability exposure on existing agreements before renewal or dispute.
Course Modules
Select any module to see its sessions and points.
01Drafting Indemnity Clauses That Do What They Promise
2 sessions · 8 points
Session 1Indemnity Triggers, Scope and Defined Loss
- Draft an indemnity trigger that identifies precisely the event, breach or claim giving rise to the indemnity.
- Define 'losses' in the indemnity to state whether it covers costs, expenses, fines and reasonable legal fees.
- Distinguish an indemnity, which reimburses a defined loss, from a damages claim requiring proof of causation.
- Assess why an indemnity claim may avoid mitigation and remoteness arguments that limit an ordinary damages claim.
Session 2Indemnities Against Damages Claims and Third-Party Proceedings
- Draft a third-party claims indemnity setting out notice, conduct of defence and settlement approval requirements.
- Require the indemnified party to give prompt notice of a claim and let the indemnifying party control its defence.
- Decide whether the indemnifying party can settle a third-party claim without the indemnified party's consent.
- Check that the indemnity's limitation period is long enough to cover claims surfacing after project completion.
02Structuring Liability Caps
2 sessions · 8 points
Session 1Cap Mechanics: Aggregate Limits, Baskets and Multiples of Fees
- Draft an aggregate annual liability cap and decide whether it resets each contract year or runs for the term.
- Set a liability cap as a multiple of fees paid in a defined preceding period rather than an arbitrary sum.
- Distinguish a per-claim cap from an aggregate cap and assess how each affects the parties' exposure.
- Decide whether the liability cap applies mutually to both parties or only limits one party's exposure.
Session 2Carve-Outs from the Liability Cap
- List the carve-outs, such as death, personal injury and fraud, that commercial parties typically leave uncapped.
- Assess whether intellectual property infringement and confidentiality breaches sit inside or outside the cap.
- Negotiate whether data protection breaches and regulatory fines are capped, uncapped or separately capped.
- Check that carve-outs are drafted narrowly enough that they do not unintentionally swallow the general cap.
03Consequential Loss and the Limits of Recoverable Damages
2 sessions · 8 points
Session 1Direct Loss Against Indirect and Consequential Loss
- Explain the two limbs of the remoteness test used to decide which losses a breaching party must compensate.
- Distinguish direct loss flowing naturally from a breach from indirect loss tied to the claimant's own circumstances.
- Identify why courts have read 'consequential loss' narrowly, so it does not automatically exclude lost profit.
- Review how procurement or sales teams misread a 'consequential loss exclusion' as excluding all financial loss.
Session 2Drafting Exclusions That Actually Exclude Loss of Profit
- Draft an exclusion listing loss of profit, revenue, business and goodwill expressly rather than 'consequential' alone.
- Decide whether excluded loss categories apply only to indirect losses or also to losses arising directly.
- Test an exclusion clause against realistic loss scenarios before the contract is signed, not after a claim arises.
- Negotiate a carve-back that keeps specific, foreseeable loss categories recoverable despite the exclusion.
04Negotiating the Liability Package as a Whole
2 sessions · 8 points
Session 1Interaction Between Indemnities, Caps and Exclusions
- Decide whether each indemnity sits inside the general liability cap or is carved out and left uncapped.
- Check that a consequential loss exclusion does not undercut an indemnity meant to cover that same loss.
- Map every liability clause in a contract onto one table showing its cap treatment and exclusion treatment.
- Identify drafting inconsistencies where one clause promises recovery that another clause silently excludes.
Session 2Insurance, Net Contribution and Negotiating Position
- Check that required insurance limits are consistent with the liability cap the same party has accepted.
- Draft a net contribution clause so one defendant is not liable for a share of loss caused by another party.
- Prepare a negotiation position paper showing the commercial impact of each proposed cap level and carve-out.
- Advise on the trade-off between a higher liability cap and a higher price or a narrower scope of work.
What the participant receives
4 course modules
A structured syllabus
8 training sessions
across 5 days
32 detailed points
Applied, detailed content
Accredited attendance certificate
On completing the programme
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