Deed of Indemnity Sample: Key Inclusions and Use in Australia

Indemnities pop up everywhere in business - from supplier contracts and reseller deals, to director protections and client service terms. If you’re looking for a deed of indemnity sample you can adapt for your small business, you’re already on the right track. Indemnities shift risk, and when they’re set out properly in a deed, they can offer stronger, more reliable protection.

In this guide, we’ll unpack what a deed of indemnity is, when you should use one, and the key clauses to include. We’ll also walk through a practical sample structure you can tailor to your situation, plus the Australian signing requirements you can’t afford to miss.

Our goal is to help you confidently brief your team or your lawyer, so your indemnity does what you expect it to do when it matters most.

What Is A Deed Of Indemnity (And Why Use A Deed Instead Of A Contract)?

A deed of indemnity is a legally binding promise to protect (and usually reimburse) one party for specific losses, liabilities or claims that arise in connection with a defined activity, transaction or risk.

Unlike a standard contract, a deed doesn’t require consideration (something of value exchanged) to be enforceable. In practice, this makes a deed a powerful way to lock in an indemnity even if there isn’t a two-way bargain at that moment (for example, where a company promises to indemnify a director for actions taken in their role).

If you’re weighing up whether to put terms in a deed or a contract, it helps to first understand what a deed is under Australian law, and how its execution and enforceability differ from ordinary agreements.

When Should A Small Business Use A Deed Of Indemnity?

You won’t need a deed for every situation. Often, a well-drafted indemnity clause inside a broader Services Agreement or Terms and Conditions will do the job. That said, a standalone deed of indemnity is worth considering where:

• You want stronger enforceability or longer limitation periods than a standard contract may offer in your state or territory.
• There’s no clear “consideration” flowing both ways (for example, a company indemnifying a director or former director).
• You need a document that operates on its own, separate from other agreements, to protect specific risks (e.g. access to premises, trials, or pilots).
• One party is taking on exceptional risk and won’t proceed without robust protection.
• You’re documenting indemnities in connection with a transaction that will outlive other commercial arrangements (e.g. asset handovers or exits).

For transactions involving payment of a release or waiver, some businesses prefer a specialised instrument such as a Deed of Waiver, Release & Indemnity rather than a standard contract.

Deed Of Indemnity Sample: A Practical Structure You Can Tailor

Every business and risk profile is different, so there isn’t a one-size-fits-all template. However, most robust deeds of indemnity follow a clear structure. Use the sample outline below as a checklist when preparing your draft.

Front Page

• Title: “Deed of Indemnity”.
• Date of the deed.
• Parties: Legal names, ACNs/ABNs and addresses of each party.
• Background/Recitals: Short, plain-English sentences describing context (e.g. “The Indemnified Party will provide access to its premises; the Indemnifier agrees to indemnify against certain risks”).

Definitions And Interpretation

• Key terms: “Claim”, “Loss”, “Indemnified Party”, “Indemnifier”, “Related Bodies Corporate”, “Third Party Claim”, “Taxes”, “Wilful Misconduct”.
• Interpretation rules: Headings, singular/plural, references to legislation, currency (AUD), “including” meaning “including without limitation”.

Core Indemnity

• Grant of indemnity: Clear promise to indemnify the Indemnified Party “from and against all Loss arising from or in connection with ”.
• Scope: Specify the activities covered (e.g. services delivered, goods supplied, use of premises, IP use, marketing campaign, pilot, event).
• Heads of loss: Address legal costs on a full indemnity basis, settlement amounts, regulatory penalties (if permitted), property damage, personal injury, and third party IP infringement.
• Carve-outs: Exclude losses caused by the Indemnified Party’s fraud, wilful misconduct or (sometimes) gross negligence. Consider proportionate liability.

Claims Handling

• Notice: Indemnified Party must promptly notify of any Claim.
• Conduct of claims: Who controls the defence? Require cooperation and information sharing, and give consent rights for settlements.
• Mitigation: Both parties must take reasonable steps to minimise Loss.

Payment Mechanics

• Timing: When indemnity payments are due after demand.
• Set-off: Whether set-off is permitted or excluded.
• GST and taxes: Clarify treatment of taxes on indemnity payments.
• Interest: Optional default interest on overdue amounts.

Limitations And Risk Allocation

• Caps and baskets: If you’re capping liability, state the cap clearly and any aggregate limits.
• Exclusions: Address consequential loss if relevant to your deal and consistent with Australian law.
• Proportionate liability: Opt out where permitted or clarify how proportionate liability laws apply.

Duration And Survival

• Term: Whether the deed is ongoing or tied to a project.
• Survival: Make clear the indemnities survive termination, expiry and completion.

General Provisions

• No merger and entire agreement (if standalone).
• Assignment and novation restrictions.
• Governing law and jurisdiction (pick the state or territory).
• Notices (email/postal rules).
• Confidentiality (especially if sensitive information is involved).

Execution As A Deed

• Execution blocks that comply with Australian deed formalities for companies and individuals.
• Counterparts and electronic execution (if permitted - more on this below).
• Witness requirements, where relevant.

Must-Have Clauses Explained (So Your Indemnity Works When Tested)

It’s common to see indemnity wording copied from another contract without thinking through the risk profile. These clauses carry real financial consequences, so a quick sanity check makes a big difference.

1) Scope And Triggers

Spell out exactly what activities or events are covered. Vague phrases like “arising from the services” may prompt disputes. If your risk is tied to specific actions (e.g. subcontractor work on your site), say so.

2) Third Party Claims

Most indemnity disputes involve third party claims. Make it clear that your indemnity covers third party allegations, investigations and proceedings, including defence costs on a full indemnity basis.

3) Carve-Outs And Proportionate Liability

Indemnifiers often want carve-outs where the Indemnified Party’s fraud or wilful misconduct caused the loss. This is sensible and fair. Consider how proportionate liability laws apply in your state or territory and whether to contract out where you’re allowed to do so.

4) Caps, Exclusions And Limitation Of Liability

It’s normal for commercial parties to negotiate caps or exclude certain types of loss. If you’re also using broader limitation of liability terms in parallel agreements, align them with your indemnity wording. For background on how these interact, it’s worth reading about limitation of liability clauses in Australian contracts.

5) Claims Control And Settlement

Decide who runs the defence and who must consent to settlements. If you’re the party paying under the indemnity, you’ll generally want control (with a duty to act reasonably and keep the other party informed).

6) Survival

Indemnities should survive termination or completion. Say this expressly. Otherwise, you risk an argument that rights ended with the underlying relationship.

How To Execute A Deed Of Indemnity Correctly In Australia

A strong indemnity can fail if the deed isn’t signed properly. Australian deeds have specific execution rules. Make sure your signing page matches the type of party involved.

Companies

Australian companies commonly sign under section 127 of the Corporations Act by two directors, a director and a company secretary, or a sole director/secretary (for single-director companies). There are practical nuances around e-signing and split execution - see this overview on documents signed in counterpart.

Individuals And Witnessing

Individuals generally sign in the presence of an independent adult witness (requirements vary by state). If your deed involves individuals (e.g. a founder giving an indemnity), double check legal requirements for signing documents and common witness signature rules.

Electronic Signing

E-signing has become more accessible across Australia, but there are still technical requirements. Your execution clause should accommodate electronic signatures where appropriate, and you should keep robust records of the signing process.

Form Of Deed

Label the document “Deed”, include language that the parties “execute this deed”, and ensure the signing block is set up for deed execution (not just an agreement). If you’re not sure, it’s safer to get tailored advice than to risk an unenforceable document.

Deed Of Indemnity vs Guarantee vs Waiver/Release

Indemnity, guarantee and release protect against risk in different ways. Choosing the right one matters.

• Indemnity: A promise to protect against defined losses or claims. It can operate even if the primary obligation is void or unenforceable.
• Guarantee: A promise to answer for someone else’s debts or defaults. This is commonly used alongside credit terms or lease arrangements - for example, via a Deed of Guarantee and Indemnity.
• Waiver/Release: A promise not to bring certain claims (often tied to settlement or access risks), which you might document in a Deed of Waiver, Release & Indemnity.

Sometimes you’ll combine these in one instrument, but it’s important to be deliberate about which tool you’re using and why.

Director And Officer Indemnities: Special Considerations

Many companies offer directors and officers an indemnity for liabilities incurred in good faith while performing their duties. If you’re preparing a deed for this purpose, consider:

• Scope: Align the indemnity with your company’s constitution and applicable law.
• Exclusions: Don’t indemnify for conduct you legally can’t (e.g. certain penalties or breaches of duty).
• Insurance: Work alongside D&O insurance - the deed can sit behind or complement your policy.
• Board process: Record approvals via an appropriate board or director’s resolution.

If you’re formalising how your company operates and allocates risk between founders and directors, it can also help to revisit your Company Constitution and, where relevant, your Shareholders Agreement so these documents work smoothly together.

Frequently Asked Questions About Deeds Of Indemnity (Australia)

Can I Just Copy A Deed Of Indemnity Sample I Found Online?

You can use a sample for inspiration, but be careful. Indemnities turn on the exact risks in your business and the laws in your jurisdiction. A generic clause can leave critical gaps or overexpose you. Start with a structure like the one above and tailor the details to your real-world risks.

Do I Need A Cap On Liability?

Many commercial parties negotiate caps to provide certainty. Whether you should cap (and at what level) depends on the risk profile, the price or fee, and any insurance coverage. Make sure any caps align with your broader contract suite and don’t undermine essential protections you need. As context, businesses often pair indemnities with carefully drafted limitation of liability provisions.

Is A Deed Better Than A Contract?

Not always - they serve different purposes. A deed is helpful where there’s no consideration, you want additional formal strength, or you need the document to stand on its own. Often, the right approach is an indemnity clause embedded in your customer or supplier agreement; in other cases, a standalone deed makes sense.

Do I Need Witnesses?

Companies don’t generally need witnesses when signing under section 127, but individuals often do. The rules vary by state and by the type of document, so check the witness signature rules relevant to your situation.

Can We Sign Electronically?

In many cases yes, but follow the technical requirements and use a reputable e-signing platform. Keep clear records of time, identity and intent. If you’re signing across multiple locations, consider adding a counterparts clause and be mindful of documents signed in counterpart.

Should I Use A Release Instead?

Releases and waivers are useful if your goal is to settle or preclude certain claims altogether. If you need both risk-shifting and finality, you might opt for a combined Deed of Waiver, Release & Indemnity. If your priority is ongoing protection for defined activities, a deed of indemnity may be more appropriate.

Common Mistakes To Avoid

• Using vague, catch-all wording that doesn’t reflect your actual risks.
• Forgetting to address third party claims and defence costs.
• Misaligning indemnity wording with your limitation of liability provisions.
• Omitting survival clauses - and discovering too late your protection ended at completion.
• Failing to execute the document as a deed, or overlooking witnessing requirements for individuals.
• Copying overseas templates that don’t reflect Australian law or your state’s specific rules.

Putting It All Together: A Deed Of Indemnity In Your Contract Suite

Think of your indemnity as one piece of your broader risk framework. Alongside the deed, you’ll usually rely on a well-drafted master services agreement or terms, appropriate insurance, and a clear internal process for handling incidents and claims.

If your deal also needs a promise to answer for another person’s default (e.g. a director backing a company’s obligations), consider whether a combined Deed of Guarantee and Indemnity is more suitable. And where you’re aiming to finally resolve or preclude disputes around a particular event, a deed of release mechanism can deliver certainty.

Finally, ensure your deed complements any governance documents you already have in place (for example, your Company Constitution and Shareholders Agreement if you operate a company), so there are no internal conflicts about authority or approvals.

Key Takeaways

• A deed of indemnity is a standalone, enforceable promise to protect against defined losses or claims - useful where there’s no consideration or you need stronger formal protection.
• Use a clear structure: context, definitions, core indemnity, claims handling, payment mechanics, limitations, survival, and correct deed execution.
• Focus on must-have clauses: precise scope, third party claims, appropriate carve-outs, aligned caps/exclusions, claims control and survival.
• Australian execution rules matter - set up proper deed signing blocks, consider e-signing and counterparts, and follow witnessing requirements for individuals.
• Choose the right tool for the job: indemnity vs guarantee vs waiver/release, and make sure your risk terms align across your contract suite.
• Start with a sample outline, but tailor the wording to your real-world risks and your state or territory’s rules.

If you’d like a consultation on drafting or reviewing a deed of indemnity for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.