Glossary · Doing the deal
In short
Indemnification is a contractual promise by one party to compensate another for losses or damages. In an acquisition, it protects the buyer from financial harm caused by seller misrepresentations or pre-closing liabilities.
Your Purchase Agreement will include indemnification clauses. These protect you from undisclosed liabilities or breaches of representations and warranties by the seller. Negotiate strong indemnification provisions, often backed by an escrow or holdback, to mitigate risks discovered during due diligence.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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