What is the difference between implicit and explicit indemnification of the contractor? Is Treasury Board approval required in all cases?
Implicit indemnification of the contractor is where the Crown limits the contractor’s liability for the Crown’s losses and its potential exposure to third party claims. It is implied that the Crown will accept responsibility for losses above the thresholds established in the contract. Only the Treasury Board, the Deputy Head of PWGSC and officials designated by the Deputy Head are delegated authority to approve implicit indemnification. Explicit indemnification is where the Crown directly and explicitly indemnifies the contractor by a clause in a contract in which the Crown assumes responsibility for specific losses or damages to the contractor and/or to the Crown for which the contractor would otherwise be liable. Only Treasury Board has the authority to approve explicit indemnification. Explicit indemnification would arise only in the most unusual circumstances. Even in such cases, the contracting authority is still responsible for ensuring that an adequate risk assessment is carried
