Indemnity is considered to be a contractual agreement
between two parties whereby one party agrees to pay for potential losses or
damages caused by another party. For example, if you buy car insurance, then
the insurance company will indemnify you against certain damages or losses. Indemnification
will define who is responsible for the losses and liability will define how
much you are responsible? Hence you “limit” the indemnification clause and you “cap”
the liability clause.