Indemnity, in the context of stock media, refers to a contractual agreement between a buyer and seller that states that the seller will compensate the buyer for any legal or financial liabilities that may arise from the use of the stock media.
Investopedia defines indemnity as “a comprehensive form of insurance compensation for damages or loss. When the term indemnity is used in the legal sense, it may also refer to an exemption from liability for damages.”
In essence, it’s like insurance for using stock media. It’s also commonly referred to as “legal coverage.
Here are three reasons why indemnity is important in stock media:
- Protects both parties
- Ensures compliance
- Provides peace of mind
Types of indemnity
- Limited indemnity: The seller agrees to indemnify the buyer for certain types of damages or liabilities but not for others. This is the most common type of indemnity in stock media licensing agreements. With most standard royalty-free licenses, the indemnity is around $10,000 per license. Extended RF licenses can cover up to $250K and $1M in rare cases.
- Full indemnity: The seller agrees to indemnify the buyer for all types of damages or liabilities related to the use of the stock media. This is rare in stock media licensing agreements, as it’s a very broad and potentially costly commitment for the seller.
- No indemnity: The seller does not provide any indemnity to the buyer, meaning the buyer is fully responsible for any legal or financial liabilities related to the use of the stock media. This is uncommon in stock media licensing agreements, as it puts all the risk on the buyer.
Why we care about indemnity
At Photutorial, we advocate safe licensing, a topic that eludes most customers online and is rarely discussed. Indemnity is an integral part of this, which is why it’s an important factor in how we rate and review stock media sites.
It shows confidence
A high indemnity amount indicates that the stock media site is confident in the quality and legality of its content. They’re willing to put their money where their mouth is by offering substantial financial coverage in case issues arise after content licensing.
A $10,000 or $250,000 indemnity demonstrates much more faith in the stock safety than a mere $500 indemnity. It suggests extensive vetting, screening, and responsibility for legal clearance.
It protects the buyer
A higher indemnity amount provides greater protection to the buyer by guaranteeing more money to cover legal or financial liabilities related to potential claims against the licensed stock media. With larger companies, the risks tend to increase as content is used more widely.
A higher indemnity amount becomes essential to cover publicity, reputational, and monetary damages. For smaller buyers, it still eliminates worries if problems do occur unexpectedly with purchased stock media.
Where can you find the indemnity amount
To have valid indemnity coverage, the exact numerical amount must be written into the full legal licensing agreement for any stock media. If no dollar amount is specified in the license terms, there is, unfortunately, no actual financial protection offered.
While many stock sites will advertise standard “indemnification included” on pricing pages or FAQs.
To simplify initial research, our stock media site reviews clearly list out the standard and extended license indemnity amounts offered by each marketplace, specifying cases of no coverage, limited coverage, or robust million-dollar protection. Use our summaries to compare coverage options.
Our top picks generally provide good or above-average indemnity:
- Best stock photo sites
- Best stock photo subscriptions
- Best stock video sites
- Best stock footage subscriptions
