AI indemnification: who pays when you get sued?

Indemnification is a promise to cover someone else's legal fees and penalties if a lawsuit happens. Paid enterprise plans often offer it to the user: if you are sued for using the output, the provider pays.

On many free tiers it is the other way round. If a prompt makes the model reproduce a protected character and the rights holder sues the provider, you may have agreed to pay the provider's legal costs. For a professional, clicking past the terms is no longer an option.