Who controls the defense determines cost, strategy, and speed of resolution. Vendors often insist on the right to defend any covered claim so they can manage counsel, coordinate messaging, and negotiate settlements that avoid broad admissions. Buyers want consent rights over settlements that impose ongoing obligations or public statements.
Settlement control language should answer three questions: Who chooses counsel? Who decides whether to settle? And can either party refuse terms that include non-monetary relief or reputational impact? Clear answers prevent gridlock when a claim arrives.
Liability caps interact with indemnity. Some contracts apply the cap to indemnity, others carve indemnity out entirely, and many take a hybrid approach (carving out IP/bodily injury but capping other categories). Whatever the structure, make sure defense costs and settlement payments land where both sides expect.
THIS IS NOT LEGAL ADVICE.