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Boilerplate Indemnity and Insurance Provisions—A Caution to Check Them before They “Boil” Your Client

Catherine J. Boggs, Mining Agreements III

After hard-fought negotiations and precise drafting of many of the unique portions of a mining contract, attorneys often resort to standard “boilerplate” indemnification and insurance provisions to include in a contract. These provisions are often broadly drafted and the parties, in their rush to conclude the deal, assume that such boilerplate agreements will be more than sufficient to provide the all encompassing protection from unknown liabilities for which they are looking.2 By employing very general language, the parties hope to avoid having to predict what future liabilities might arise; however, the question of which future liabilities were intended to be covered may come back to haunt a party when a court declares the indemnity provision ambiguous and seeks to establish through parol evidence the intent of the parties.3

As the discussion below points out, oftentimes the intent of at least one of the parties in inserting boilerplate indemnity provisions may be changed and significantly abrogated by statute or judicial interpretations of standard language commonly used in contracts, which attorneys incorrectly assume has definite meanings. States vary significantly in the manner in which they treat “standard” language and interpret what is covered under such general provisions. Therefore, it behooves the drafter of a mining contract to think seriously about what h