Indemnification is a way to provide limited liability protection to the people whose role is to manage, operate or oversee a company.

A structure such as a corporation or limited ​liability company provides the shareholders or owners with limited liability protection from debts that exceed their investment in the company.

Because those limited liability protections may not auto​matically extend to people filling the roles of directors, officers, managers or employees, many companies choose to adopt an indemnification provision in the articles of incorporation or articles of organization as a way to shield them from liability. In many cases, the shareholders or owners are filling these roles and may benefit from the additional protections that an indemnification provision provides.​

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