Indemnity Forms In New Zealand: What They Are And Key Clauses To Include

If you run a small business, you've probably been asked to sign "an indemnity" or been told you should have an indemnity form in place before a job starts.

It's a common moment: you're about to start working with a new client, host an event, send contractors on-site, or let customers use your equipment - and suddenly you're thinking, "What happens if something goes wrong?"

An indemnity form can be a smart part of your legal foundations, but it's not a magic shield. In New Zealand, there are real limits on what an indemnity can do, and if it's drafted poorly (or used in the wrong situation), it might not protect you when you need it most.

In this guide, we'll break down what an indemnity form is, when it's worth using, how it interacts with New Zealand laws, and the key clauses to include so it actually works for your business.

What Is An Indemnity Form (And What Does It Actually Do)?

An indemnity form is a written agreement where one party promises to cover certain losses or costs suffered by another party.

In practical business terms, an indemnity is usually trying to do one (or both) of these things:

• Shift risk - e.g. if something goes wrong, the other party pays your losses.
• Cover specific costs - e.g. legal fees, claims from third parties, damage to property, or losses from a breach.

Indemnity forms are often used alongside (or inside) broader documents like:

• service agreements and customer terms
• contractor agreements
• venue hire terms and waivers
• supplier agreements
• event registration forms

Important: an indemnity isn't the same thing as "not being liable". An indemnity is a promise to pay (or reimburse) certain losses. You can still be liable in law - the indemnity is about who ultimately wears the cost.

And a quick reality check: even a well-written indemnity form can be limited by consumer law, health and safety obligations, unfair contract term rules, and New Zealand's no-fault ACC scheme for personal injury. That's why the wording and the context matter.

When Do Small Businesses In NZ Usually Need An Indemnity Form?

You don't need an indemnity form for every interaction. But there are some common situations where it's genuinely useful - especially where your business is exposed to property damage, personal injury risks, third-party claims, or operational losses you can't fully control.

1) When Customers Or Clients Are Using Your Premises, Equipment Or Facilities

If you run a business where people are physically engaging with what you provide (even in a low-key way), an indemnity can help manage the "what if" scenarios.

Examples include:

• studio hire or venue hire
• equipment rental
• fitness, classes, or workshops (in-person)
• events where attendees are on-site

In these cases, your indemnity form might be designed to cover things like damage caused by the customer, or claims arising from the customer's own actions.

2) When You're Working On A Client's Site (Or They Control The Site)

Tradies, consultants, service providers, and contractors often work in environments they don't control. You may still be blamed if something goes wrong.

An indemnity can help where the client's site conditions (or the client's instructions) create risk - for example, the client asks you to work around unsafe access, faulty equipment, or incomplete information.

This is also where a proper Service Agreement (including an indemnity clause) can be more effective than a standalone one-page form, because it lets you tie the indemnity to payment terms, scope, limitations, and dispute processes.

3) When You Engage Contractors Or Subcontractors

If you're outsourcing part of your delivery, your business can end up exposed to:

• property damage caused by a contractor
• third-party claims (for example, the contractor injures a customer)
• loss caused by a contractor's breach (for example, confidentiality breaches)

This is a common reason businesses include indemnities within a Contractor Agreement (or a subcontractor agreement) - so you're not left paying for someone else's mistake.

4) When You're Handling Valuable Client Property, Stock Or Data

If clients provide you with property (e.g. goods for repair, consignment stock, equipment you're servicing) you may want indemnity wording dealing with:

• loss due to client misrepresentation (e.g. the item wasn't safe or legal to handle)
• loss caused by hidden defects
• third-party claims linked to ownership disputes

If you're collecting personal information as part of your forms (for example, event registrations or onboarding forms), make sure the rest of your legal setup is aligned with privacy requirements. Many businesses also publish a Privacy Policy so customers understand what you collect and why.

5) When You Want To Reduce Disputes Over "Who Pays" If Something Goes Wrong

Sometimes the biggest value of an indemnity form is clarity. If there's a dispute, it's much easier to resolve when the agreement clearly states:

• what risks are allocated to which party
• what losses are covered
• what the process is when a claim occurs

Without that, you may end up stuck in a messy argument about what was "reasonable", who "caused" the issue, and whether the other party has to reimburse you.

What NZ Laws Can Limit An Indemnity Form?

This is where a lot of businesses get caught out: an indemnity form can be enforceable in New Zealand, but it doesn't override other legal obligations.

Here are some key legal constraints to keep in mind.

Consumer Guarantees Act 1993 (CGA)

If you supply goods or services to consumers (people acquiring them for personal, domestic, or household use), the Consumer Guarantees Act 1993 gives them automatic guarantees about quality, fitness for purpose, and reasonable care and skill.

In many consumer situations, you can't simply "contract out" of those guarantees using an indemnity form (or a disclaimer). Trying to do so can be ineffective and create risk if your marketing or paperwork is misleading.

If you mostly deal business-to-business (B2B), you may sometimes be able to contract out of the CGA - but only where the goods or services are acquired for business purposes, and the contracting-out is in writing and fair and reasonable in the circumstances. If you don't meet those requirements, the attempted contracting-out can fail.

Fair Trading Act 1986 (FTA)

The Fair Trading Act 1986 prohibits misleading or deceptive conduct. If your indemnity form implies you have fewer responsibilities than you actually do, or it's presented in a way that confuses customers about their rights, you could create compliance issues.

So even if the indemnity clause itself is technically enforceable, the way you describe it (online or in onboarding emails) matters.

Health And Safety At Work Act 2015 (HSWA)

If your business is a PCBU (and most businesses are), you have duties under the Health and Safety at Work Act 2015 to ensure health and safety so far as is reasonably practicable.

An indemnity form doesn't remove your duty to manage risks. You generally can't "paper over" unsafe practices with a form.

In other words: use an indemnity as part of your risk management, but don't treat it as your risk management.

ACC And Personal Injury (Why "Injury Waivers" Don't Work The Way People Think)

New Zealand's ACC scheme is generally a no-fault system for personal injury. That often means a person can't sue for compensatory damages for personal injury covered by ACC (with limited exceptions).

Because of this, many "injury indemnities" and waivers don't operate as a simple way to avoid injury-related exposure. They may still be relevant for things like property damage, third-party losses, or certain costs not covered by ACC - but they won't override your health and safety obligations, and they won't necessarily stop disputes or regulatory consequences if an incident occurs.

Unfair Contract Terms (UCT) Rules

If you use standard form terms (for example, the same indemnity form for every customer or small client), parts of it may be challenged under the unfair contract term rules in the Fair Trading Act.

In New Zealand, unfair contract terms generally become a problem where a term is in a standard form consumer contract (and, in some cases, a standard form small trade contract) and a court has declared the term unfair - typically following action by the Commerce Commission. This doesn't mean you can ignore UCT risk: a very broad indemnity can attract scrutiny and become difficult to rely on in practice.

This is especially relevant if your indemnity clause is extremely broad - for example, it says the other party indemnifies you for "any loss of any kind" even if you were negligent.

This doesn't mean you can't use indemnities. It just means the clause needs to be proportionate, clearly explained, and aligned with real risks.

Key Clauses To Include In An Indemnity Form (So It's Not Just A Piece Of Paper)

If you want your indemnity form to actually work in practice, it needs to be specific, consistent with your other terms, and clear about the scope.

Here are clauses we commonly recommend considering (depending on your situation).

1) Clear Parties, Dates And Context

Sounds basic, but it's critical. Your indemnity form should clearly identify:

• who is giving the indemnity and who receives it (legal names, entity types, and addresses)
• the date it applies from
• what activity or transaction it relates to (e.g. "use of the premises on", "hire of equipment", "participation in")

One common issue with DIY forms is that the indemnity is so generic that it's unclear what it covers.

2) The Indemnity Grant (What Losses Are Covered)

This is the core clause: what does the indemnifying party actually have to reimburse or cover?

Depending on your risks, you might include coverage for:

• loss or damage to property
• claims by third parties
• legal costs (often on a "solicitor-client" basis)
• fines or penalties (note: these can be tricky and may not always be appropriate or enforceable)
• business interruption costs (only if justified and clearly drafted)

The more tailored this is to your real operations, the more defensible it tends to be.

3) The Trigger Events (When The Indemnity Applies)

It's not enough to say "you indemnify us". You should set out the scenarios that trigger it.

For example:

• loss arising from the customer's misuse of equipment
• loss arising from the customer's breach of your instructions or safety rules
• loss caused by false information the other party provided
• loss caused by the other party's negligence or wilful misconduct

This is also where you should think carefully about whether you're trying to cover your own mistakes (more on that below).

4) Carve-Outs And Limits (What The Indemnity Does Not Cover)

Counterintuitively, limitations can make an indemnity stronger - because the clause looks fairer and more aligned to a real risk allocation.

Common carve-outs include:

• loss caused by your breach of contract
• loss caused by your negligence (or, alternatively, limiting indemnity only to the extent of the other party's fault)
• loss caused by events outside both parties? control (where a force majeure clause may be more appropriate)

If you want to include an indemnity that covers you even where you were negligent, this needs careful drafting and should be reviewed in light of your consumer/commercial context and UCT risk.

5) A Liability Cap (And Insurance Alignment)

Many indemnity clauses pair well with a liability cap - for example, a maximum dollar amount, or a cap linked to fees paid.

It's also smart to align your indemnity with your insurance position. Ask yourself:

• Are you promising things your insurance won't cover?
• Are you relying on an indemnity where you should actually hold insurance yourself?
• Do you require the other party to hold specific insurance (and provide evidence)?

This is a classic "small business trap": the contract says one thing, your insurer assumes another, and when a claim happens the gap becomes very expensive.

6) Notification And Claims Handling (The Process When Something Goes Wrong)

If a third-party claim comes in, who controls the defence? Who can settle? Who pays legal fees as they are incurred?

A good indemnity form often includes process steps like:

• the indemnified party must notify the indemnifying party promptly of a claim
• the indemnifying party may (or must) take over defence of the claim
• the indemnified party must provide reasonable assistance
• settlement requires consent (or must be reasonable)

This can prevent disputes where the indemnifying party says, "I would've handled it differently - so I'm not paying."

7) Relationship With Other Documents (Priority And Consistency)

If you already have customer terms, a contract, or a proposal that's accepted, you need to decide:

• does the indemnity form sit within the contract, or is it separate?
• which document takes priority if there's inconsistency?
• how does the indemnity interact with any limitation of liability clause?

For many businesses, it's cleaner to include indemnities inside a properly structured agreement (rather than getting signatures on multiple documents that may contradict each other). For example, online businesses often rely on website terms such as Website Terms And Conditions to keep the risk allocation consistent across customers.

8) Signatures And Execution

Even the best indemnity clause won't help you if you can't prove it was agreed to.

Make sure your process is solid:

• the other party actually receives the indemnity before the risky activity starts
• the indemnity is clearly brought to their attention (not hidden)
• it's properly signed (or accepted online in a legally meaningful way)

If you're relying on witnessing for certain documents, it's worth knowing who can witness a signature in New Zealand and when witnessing is (and isn't) required.

Common Mistakes With Indemnity Forms (And How To Avoid Them)

Indemnity forms are everywhere - but a lot of them don't work well because they're treated as a "set and forget" admin task.

Here are some of the most common issues we see for small businesses.

Using A Generic Template That Doesn't Match Your Risks

An indemnity for a construction site is very different from an indemnity for a creative workshop, and both are different again from an indemnity for SaaS onboarding.

If the form doesn't match your actual operations, you might end up with:

• gaps (the risk you meant to cover isn't mentioned)
• inconsistencies (your other terms say something else)
• overreach (it's so broad it becomes vulnerable to challenge)

This is why it's usually safer to have your indemnity drafted as part of a complete agreement, like a tailored Contract Drafting package, rather than bolting a template onto your business.

Trying To Use An Indemnity As A Substitute For Safety And Compliance

If your business has health and safety risks (even moderate ones), you still need to manage them properly. An indemnity isn't a workaround for:

• not having safe procedures
• not providing training or supervision
• not maintaining equipment

Real protection is layered: good practices + insurance + the right contracts.

Not Considering Whether You're Dealing With Consumers Or Businesses

This matters a lot in NZ because consumer law can restrict your ability to limit liability.

If your customers are consumers, you may need to rely on different protections (clear instructions, careful advertising, proper refund processes) rather than expecting an indemnity to do all the work.

Relying On A Form That Isn't Properly Accepted

A form you emailed but never got signed, or a PDF link nobody opened, may not help.

Make acceptance part of your workflow, not an afterthought.

Key Takeaways

• An indemnity form is a legal promise that one party will cover certain losses or costs suffered by another party, often used to allocate risk in business relationships.
• Small businesses commonly use indemnity forms when customers use premises/equipment, when working on client sites, when engaging contractors, or when there's a real risk of third-party claims.
• Indemnities aren't unlimited - they can be affected by the Consumer Guarantees Act 1993, Fair Trading Act 1986, Health and Safety at Work Act 2015, the ACC no-fault personal injury regime, and unfair contract term rules.
• A strong indemnity form clearly defines the parties, the covered losses, the trigger events, and includes sensible limitations, claims handling processes, and consistency with your other business terms.
• Common mistakes include using generic templates, relying on an indemnity instead of proper compliance and safety, and failing to ensure the form is properly accepted before the activity begins.
• If you're unsure what indemnity wording fits your business model (and what might be unenforceable), getting tailored legal advice early can save you a lot of time and cost later.

If you'd like help drafting or reviewing an indemnity form (or building it into a broader contract so it's consistent with your business), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.