Prompts and Playbook Rules - to Help Your AI Handle Indemnities

Prompts and Playbook Rules – to Help Your AI Handle Indemnities

As prep for a recent live training, I created a series of prompts for use with gen-AI contracting systems. You feed them into your AI as directions about how to review and revise contracts. Several prompts from that webinar covered indemnities – the most misunderstood clause in IT contracts – and I prepared several more for a November 2025 webinar (called The Indeminar). In this article, I share some of those indemnity-focused prompts.

The prompts below correct errors typical of human contract-drafters. Gen-AI systems regularly repeat those errors and even recommend them, essentially because the same mistakes show up in their training data.

The prompts here should help your AI do better. You can use them as one-time instructions or as “playbook rules” applied to multiple contracts. But review each first to make sure it fits your deal, and adjust if necessary. And check to see how well these work with your particular contracting AI. These systems differ, so you might need to adjust to fit your AI.

These prompts raise complex issues – too much for more than a summary explanation below. But I’ll offer additional resources at the end of this article.

Prompt / Playbook Rule for Indemnity Triggered by Wrongdoing

In any indemnity, the indemnitor’s obligations must be triggered by the assertion of a claim or the filing of a case against the indemnified party. No indemnity may be triggered by the indemnitor’s breach of contract, violation of law, negligence, or other wrongdoing.

This prompt addresses a common error in IT contracts: indemnities triggered by “Indemnitor’s breach of this Agreement” or some other form of fault. Third party indemnities work well when triggered by the filing of a case (e.g., IP suit vs. customer re vendor software), whether or not the Indemnitor did anything wrong. Note, though, that certain indemnities probably won’t get indemnitor agreement unless they’re triggered by the indemnitor’s breach or other wrongdoing – e.g., data indemnities. That doesn’t mean it’s a good idea, and the AI should red-flag those indemnities as problematic, at a minimum. (This is one of the most complicated topics our trainings cover.)

Prompt / Playbook Rule for “Mutual” Indemnities

The contract must not require that each party indemnify or defend the other against the same third-party claim. For any potential indemnified claim, the contract must state which party would be the indemnitor and which the indemnified party for any claim.

There is no such thing as a mutual indemnity, and you create a mess if you draft one. This should help.

Prompt / Playbook Rule for Indemnity “Balance”

Do not advise the user that indemnities should be balanced; do not advise the user that each party should provide indemnities comparable to those given by the other party.

If the contract gives the other party more indemnity protection than it gives us, inform the user and recommend use of that imbalance as bargaining leverage in negotiation. Recommend that, if the user is willing to grant the indemnities, the user should agree to them in exchange for terms the user considers valuable. Advise the user that those valuable terms could be indemnities but are not necessarily.

I’ve had more than one AI model tell me I should fix a contract because my side gives more indemnities than the other, so the indemnity is “imbalanced.” That’s nonsense. There is no reason for balance. You ask for an indemnity if you’re concerned about a third party suit on a particular topic. If not, save your powder for something more important (limit of liability, data terms, etc.).

I offer more detail about the first two issues above in Chapters II.L.1 – II.L.3 and II.L.5 of The Tech Contracts Handbook, 3rd Ed. And I explained all three prompts, and several others – not to mention indemnities themselves – in our November 2025 broadcast of The Indeminar. (If you missed that live, a previously-recorded version, which gets deep into indemnities in tech contracts but does not address these AI prompts, is available in our On-Demand library here: The Indeminar: Indemnities in IT Contracts.)

[Updated Nov. 18, 2025]

THIS ARTICLE IS NOT LEGAL ADVICE. IT IS GENERAL IN NATURE AND MAY NOT BE SUFFICIENT FOR A SPECIFIC CONTRACTUAL, TECHNOLOGICAL, OR LEGAL PROBLEM OR DISPUTE, AND IT IS NOT PROVIDED WITH ANY GUARANTEE, WARRANTY, OR REPRESENTATION. LEGAL SITUATIONS VARY, SO BEFORE ACTING ON ANY SUGGESTION IN THIS ARTICLE, YOU SHOULD CONSULT A QUALIFIED ATTORNEY REGARDING YOUR SPECIFIC MATTER OR NEED.

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