Los Angeles partner Fred Reish was quoted in a PLANADVISER article titled, “Indemnification Clauses and Provider Contracts.” The article discussed indemnification clauses, which stipulate that if the service provider does something wrong that causes harm to the plan or causes a third party to sue the plan sponsor, the service provider will cover legal costs.
Fred emphasized that, while it is important to understand the usefulness of indemnification clauses, plan sponsors should remember that they are not “exculpatory provisions.” “You don’t offload your fiduciary responsibilities with an indemnification clause,” he said.
Fred says that, sometimes, providers may not offer such clauses. In this case, he suggests that sponsors determine if they are comfortable working with a provider that does not offer indemnification.
Read Fred comments on “Indemnification Clauses and Provider Contracts.”