Enhanced Prompt: Drafting a Contractual Tender of Defense

You are tasked with drafting a formal tender of defense letter that demands a contracting party assume the defense and indemnification of your client in pending litigation based on contractual obligations. This sophisticated legal document serves multiple strategic purposes: shifting defense costs to the proper party, preserving indemnification rights, triggering insurance coverage obligations, and creating a foundation for potential breach of contract claims.

Understanding Your Role and Context

A contractual tender of defense differs fundamentally from an insurance tender. You are demanding defense from a contracting party based on indemnification clauses in a commercial agreement, not merely requesting coverage from an insurance carrier. The recipient is typically a business entity—such as a subcontractor, vendor, property manager, or service provider—that contractually agreed to defend and indemnify your client. This party will likely need to tender the claim to their own insurance carrier, meaning your letter often triggers a chain reaction of coverage determinations.

Your audience frequently consists of general counsel or business executives rather than professional claims adjusters, requiring a tone that is authoritative yet educational. Unlike insurance adjusters who handle tenders routinely, your recipient may be encountering this situation for the first time and may need guidance on the implications and next steps. Common scenarios include construction matters where a subcontractor must defend the general contractor, vendor relationships where service agreements contain indemnification provisions, property management situations involving premise liability claims, and event or venue arrangements with contractual risk allocation.

Comprehensive Document Analysis and Information Gathering

Before drafting your tender letter, you must conduct thorough analysis of all available documents and information. Begin by searching through all uploaded documents to locate the underlying contract between your client and the party you are tendering to. Extract and analyze the complete indemnification clause, noting whether it is broad form covering claims "arising out of" or "related to" the indemnifying party's work, or limited form covering only claims caused by the indemnifying party's negligence or willful misconduct. Determine whether the duty to defend is triggered immediately upon tender or only after a determination of fault.

Locate and review the insurance requirements section to identify required coverage types, minimum limits, additional insured obligations, and whether the contract specifies that such insurance shall be primary and non-contributory. Search for any notice provisions that dictate how and when tender must be made, as failure to comply with contractual notice requirements may jeopardize your client's rights. Examine scope limitations, carve-outs, or exclusions that might affect the indemnification obligation, and pay particular attention to whether the contract contains mutual indemnification provisions, comparative fault allocations, or choice of law clauses that may impact enforceability.

Next, search the uploaded documents for the complaint or petition filed in the underlying litigation. Extract the specific allegations that relate to the recipient's scope of work under the contract. Identify the plaintiff's name, the court and case number, the date of filing, and all allegations that potentially implicate the recipient's performance. Note any allegations regarding the date and location of the incident, the nature of the injuries or damages claimed, and the theories of liability asserted.

Search for any correspondence, incident reports, or other documents that provide factual background about the underlying incident. Look for evidence of the recipient's actual performance under the contract, any complaints or concerns raised during the contract term, and any prior communications about the incident that led to the litigation. If defense costs have already been incurred, search for billing records or fee summaries that quantify the financial exposure.

Document Structure and Professional Formatting

Your tender letter should be drafted as a complete, professionally formatted legal document ready for attorney review and signature on law firm letterhead. The document should be sent via certified mail with return receipt requested to create proof of delivery. Address the letter to the appropriate recipient as designated in the contract's notice provision, which you should have identified through your document search. If no specific recipient is identified in the contract, address it to the company's registered agent and general counsel simultaneously.

The reference line should clearly identify the litigation, the parties, and the contractual basis for your demand. Use this format: "RE: Tender of Defense and Indemnification - [Plaintiff Name] v. [Your Client] - [Court and Case Number] - Pursuant to [Contract Type] dated [Date]." This immediately frames the communication as a formal legal demand based on contractual obligations rather than a courtesy notification.

Opening Statement: Clear and Unambiguous Demand

Begin with a direct, unambiguous statement of representation and demand that leaves no doubt about the purpose of the letter and the seriousness of the demand. Identify yourself as counsel for the client, reference the pending litigation with complete case caption and court information, cite the specific contract creating the obligation with exact date and parties, and make an explicit demand for assumption of defense and indemnification.

Your opening paragraph should establish immediate authority and clarity. For example: "This firm represents [Client Name] in connection with litigation filed by [Plaintiff Name] in the [Court Name], Case No. [Number]. Based on the [Contract Type] dated [Date] between [Client] and [Recipient Company], we hereby formally demand that [Recipient Company] immediately assume the complete defense and indemnification of [Client] in this matter pursuant to the express terms of that Agreement. This tender is made pursuant to Section [X] and all related provisions requiring defense and indemnification."

Contractual Provisions: Verbatim Quotation and Analysis

Create a dedicated section that quotes the relevant contractual language verbatim, serving both as legal support for your demand and as an educational tool for recipients who may not have recently reviewed the contract. Quote the indemnification clause in its entirety, including any definitions that affect its interpretation, and reference specific section numbers and page numbers to facilitate the recipient's review.

After quoting each provision, provide a brief but clear interpretation that connects the language to the current situation. Explain how the specific wording of the clause applies to the allegations in the litigation. For example, if the clause uses "arising out of" language, explain that this broad trigger encompasses any claim with a causal connection to the recipient's work, regardless of whether the recipient was ultimately negligent. If the clause specifies that the duty to defend applies "regardless of whether such claims are caused in whole or in part by the negligence" of your client, emphasize that this language eliminates any comparative fault defense to the duty to defend.

If the contract contains insurance requirements, quote those provisions in full and emphasize any language requiring the recipient to name your client as an additional insured or specifying that such coverage shall be primary and non-contributory. Explain the practical implications: that the recipient's insurance should respond first, and that your client's insurance should not contribute to the defense or indemnity unless the recipient's coverage is exhausted.

Factual Nexus: Connecting Allegations to Contractual Obligations

This section is critical to the success of your tender and requires careful analysis of both the complaint and the contract's scope of work provisions. Begin by summarizing the relevant allegations from the complaint, quoting specific paragraphs that relate to the recipient's performance. Focus on allegations that describe the incident, the claimed injuries or damages, and the theories of liability that potentially implicate the recipient's work.

Then explicitly connect those allegations to the specific services or obligations the recipient assumed under the contract. Quote the contract's scope of work provisions and demonstrate how the alleged conduct falls within that scope. For example: "The complaint alleges that on [date], [Plaintiff] suffered injuries when [specific incident] occurred at [location]. According to Paragraph [X] of the complaint, these injuries resulted from [specific conditions or conduct]. Under Section 2.1 and Exhibit A of the Agreement, [Recipient Company] was specifically responsible for [relevant services]. The complaint's allegations directly implicate [Recipient Company's] performance of these contractual obligations."

Emphasize that the duty to defend is typically broader than the duty to indemnify, being triggered by the potential for coverage rather than actual liability. Explain that even if ultimate liability is uncertain or if your client may bear some comparative fault, the contractual duty to defend is triggered by allegations that potentially fall within the indemnification clause's scope. If the indemnification clause uses "arising out of" or similar broad language, emphasize that courts interpret such language expansively to encompass any claim with a causal nexus to the indemnifying party's work.

Insurance Coverage Demand and Documentation Requirements

If the contract requires the recipient to maintain insurance and name your client as an additional insured, make specific demands regarding insurance coverage with clear deadlines and documentation requirements. Reference the exact insurance requirements from the contract, quoting the specific section and identifying the required coverage types, minimum limits, and additional insured obligations.

Demand that the recipient immediately tender the claim to their liability insurance carrier and provide proof that required coverage is currently in force. Specify the documentation you require: "We demand that [Recipient Company] immediately tender this claim to their Commercial General Liability insurance carrier and provide proof of such tender within ten (10) days. Additionally, [Recipient Company] must furnish a current certificate of insurance evidencing that [Client] is named as an additional insured on a primary and non-contributory basis, along with a certified copy of the actual policy endorsement conferring additional insured status. The Agreement specifies that this insurance shall be primary to any coverage maintained by [Client], and we expect [Recipient Company's] insurer to acknowledge this priority in writing."

Explain the implications of the primary and non-contributory language, making clear that the recipient's insurer cannot seek contribution from your client's insurance and that the recipient's insurer must defend without reservation of rights based on any alleged comparative fault of your client.

Specific Demands with Clear Deadlines and Action Items

Provide a clearly delineated list of specific actions you demand the recipient take, along with reasonable but firm deadlines for each action. Your demands should be comprehensive and actionable, covering acknowledgment of the tender, retention of defense counsel, assumption of defense costs, insurance tender and documentation, and confirmation of indemnification obligations.

Frame these demands with specificity and urgency: "We demand that [Recipient Company] immediately take the following actions: First, provide written acknowledgment of this tender of defense and indemnification within ten (10) days of receipt of this letter, confirming acceptance of the duty to defend and indemnify. Second, retain qualified litigation counsel acceptable to [Client] to assume the defense of this matter, with such retention to occur within fifteen (15) days and with written notice to this firm of counsel's identity and contact information. Third, assume responsibility for all defense costs and expenses incurred by [Client] from the inception of this litigation, including reimbursement of fees and costs already incurred by this firm in the amount of $[amount] as detailed in the attached fee summary. Fourth, tender this claim to your Commercial General Liability insurance carrier within ten (10) days and provide proof of such tender. Fifth, provide current certificates of insurance and certified policy endorsements evidencing that [Client] is named as an additional insured with primary and non-contributory coverage within fifteen (15) days. Sixth, confirm in writing your acceptance of full indemnification obligations under the Agreement within ten (10) days."

Specify deadlines that are reasonable given the litigation timeline but create appropriate urgency. If responsive pleadings or other deadlines are imminent, note this explicitly to emphasize the time-sensitive nature of your demand and the potential for procedural complications if the tender is not promptly accepted.

Consequences of Non-Compliance: Preserving Rights and Remedies

Clearly articulate the consequences if the recipient fails to accept the tender, making this section firm but professional to demonstrate that refusal will be treated as a material breach of contract with significant financial and legal ramifications. Preserve your client's rights to continue defending the action while seeking reimbursement, to pursue breach of contract claims, and to seek all resulting damages including attorney's fees.

State with clarity and authority: "Failure to accept this tender and assume the defense as demanded will constitute a material breach of the Agreement. In such event, [Client] will be compelled to continue defending this action at significant expense and will pursue all available remedies against [Recipient Company], including but not limited to: (1) a claim for breach of contract seeking reimbursement of all defense costs and expenses, including attorney's fees incurred in the underlying litigation and in pursuing the breach of contract claim; (2) a claim for breach of the covenant of good faith and fair dealing; (3) recovery of any damages, settlements, or judgments paid by [Client] that should have been covered by [Recipient Company's] indemnification obligation; and (4) recovery of consequential damages resulting from the breach, including damage to business relationships and reputation. [Client] expressly reserves all rights and remedies available under the Agreement, at law, and in equity, and nothing in this letter shall be construed as a waiver of any such rights."

Consider adding language about the potential for the recipient's insurance coverage to be jeopardized by late notice: "We note that [Recipient Company's] delay in tendering this claim to its insurance carrier may prejudice coverage, as most liability policies require prompt notice of claims and potential claims. Any coverage issues resulting from delayed tender will be the sole responsibility of [Recipient Company] and will not excuse performance of the contractual indemnification obligations."

Litigation Timeline and Procedural Context

Include a section that provides detailed context about the current procedural posture of the litigation and upcoming deadlines to create urgency and demonstrate that the recipient cannot delay in responding. Specify when the complaint was filed, when responsive pleadings are due, what discovery deadlines are approaching, whether any motions are pending, and any other time-sensitive matters that affect the defense strategy.

For example: "This matter is currently in active litigation with significant deadlines approaching that require immediate attention. The complaint was filed on [date], and [Client's] responsive pleading is due on [date], which is [X] days from the date of this letter. Discovery is scheduled to commence on [date], with initial disclosures due [date] and the first depositions scheduled to begin [date]. The court has set a case management conference for [date] and a trial date of [date]. Your immediate attention to this tender is essential to ensure continuity in the defense, to avoid procedural complications such as waiver of defenses or default, to prevent duplicative work by multiple counsel, and to minimize defense costs that could be avoided through prompt action and coordinated defense strategy."

If any particularly significant deadlines are imminent, such as a motion to dismiss deadline or a summary judgment hearing, highlight these specifically to emphasize the need for immediate engagement by defense counsel. If your client has already begun defending the case and has incurred substantial fees, note this to demonstrate the financial stakes and the urgency of reimbursement.

Professional Tone with Educational Elements

Throughout the letter, maintain a tone that is authoritative and firm while remaining professional and, where appropriate, educational. Remember that you may be addressing business executives or in-house counsel who are not specialists in indemnification law and may be encountering this situation for the first time. Your goal is to prompt the recipient to engage their insurance carrier and legal counsel, not to immediately deny responsibility out of defensive reflex.

Explain the implications clearly without being condescending. Help them understand that accepting the tender is not an admission of liability but rather a fulfillment of contractual obligations that were bargained for when the contract was executed. Where appropriate, acknowledge any ongoing business relationship and frame the tender as a matter of contractual partnership and mutual obligations rather than adversarial positioning. For example: "We recognize that [Client] and [Recipient Company] have maintained a productive business relationship, and we trust that [Recipient Company] will honor its contractual commitments as [Client] has consistently honored its obligations under the Agreement. The indemnification provisions were negotiated as part of the overall risk allocation in this commercial relationship, and we expect [Recipient Company] to fulfill these obligations in the same professional manner that has characterized our clients' business dealings."

Consider including a brief explanation of the tender process and next steps to guide the recipient: "Upon receipt of this tender, we recommend that [Recipient Company] immediately forward this letter and all attachments to its insurance broker and liability insurance carrier. The carrier will assign a claims adjuster who will investigate the claim and make a coverage determination. If coverage is confirmed, the carrier will typically appoint defense counsel to represent both [Recipient Company] and [Client] as an additional insured. We are available to discuss this matter with [Recipient Company's] counsel and insurance representatives to facilitate a smooth transition of the defense."

Attachments and Supporting Documentation

Conclude your letter by listing all attachments that support your tender and provide the recipient with the information necessary to evaluate the demand and tender to their insurance carrier. At minimum, attach a copy of the complaint or petition filed in the underlying litigation, relevant excerpts or a complete copy of the contract containing the indemnification and insurance provisions, and any prior correspondence related to the incident or claim.

If you have already incurred defense costs, attach a detailed summary of fees and expenses to date, organized by attorney, task, and date, to demonstrate the financial stakes and to facilitate reimbursement. If there are incident reports, photographs, witness statements, or other documents that provide factual background, consider including these to give the recipient and their insurance carrier a complete picture of the claim.

State clearly: "Attached hereto and incorporated by reference are the following documents: Exhibit A - Complaint filed in [Case Name and Number]; Exhibit B - [Contract Type] dated [Date] between [Client] and [Recipient Company]; Exhibit C - Summary of Defense Costs and Expenses incurred to date; Exhibit D - [Any other relevant documents such as incident reports, correspondence, or photographs]. These documents provide the factual and contractual basis for this tender and should be immediately forwarded to your insurance carrier and legal counsel to facilitate prompt evaluation and response."

Legal Disclaimers and Reservation of Rights

Include all necessary legal disclaimers to preserve your client's rights and avoid any argument that the tender itself constitutes a waiver or admission. State clearly: "This tender is made without waiver of any rights, defenses, or claims [Client] may have against [Recipient Company] or any other party, including without limitation any claims for breach of contract, breach of warranty, or indemnification arising from [Recipient Company's] performance or non-performance under the Agreement. [Client] reserves the right to supplement this tender with additional information as it becomes available through discovery or investigation. This communication is made in contemplation of litigation and is subject to all applicable privileges, including attorney-client privilege and work product protection. Nothing in this letter should be construed as an admission of any fact or liability by [Client]."

If there are multiple potentially responsible parties or if your client may have claims against the recipient beyond the indemnification obligation, make clear that the tender does not limit your client's ability to pursue those claims: "[Client] reserves all rights to pursue claims against [Recipient Company] for breach of contract, negligence, or other causes of action arising from [Recipient Company's] performance under the Agreement, and acceptance of this tender shall not constitute a waiver or release of any such claims."

Output Requirements and Quality Standards

Your final tender letter must be a complete, professionally formatted legal document ready for attorney review and signature. The letter should be comprehensive yet concise, typically ranging from four to six pages depending on the complexity of the contractual provisions and factual circumstances. Use clear headings and logical organization to facilitate understanding by recipients who may not be legal specialists. Every assertion must be supported by specific reference to contractual language or complaint allegations, with exact citations to section numbers, page numbers, and paragraph numbers.

The tone must be firm and authoritative while remaining professional and appropriate for the recipient, striking a balance between demanding compliance and maintaining the possibility of an ongoing business relationship. Avoid inflammatory language or personal attacks, focusing instead on the contractual obligations and legal consequences of non-compliance. Use active voice and clear, direct sentences that leave no ambiguity about what is being demanded and when.

Demonstrate sophisticated understanding of indemnification law, contract interpretation, insurance coverage principles, and litigation strategy throughout the document. Show awareness of potential coverage defenses and address them preemptively where appropriate. For example, if the recipient might argue that the claim falls outside the scope of the indemnification clause, address this argument directly by explaining why the allegations fall within the clause's scope under applicable case law.

The letter should be immediately usable by a senior attorney with minimal revision, serving as both a legal demand and a strategic tool in the overall management of the litigation. It should position your client favorably for any subsequent breach of contract litigation while also creating incentives for the recipient to accept the tender and engage their insurance carrier. The document should reflect the high standards of a sophisticated commercial litigation practice and demonstrate value to the client through thorough analysis, clear communication, and strategic positioning.