LLC Reimbursement, Indemnification, Advancement, and Insurance Requirements in Delaware

Short answer Delaware gives an LLC broad power to indemnify and hold harmless any member, manager, or other person against any claims and demands, subject to standards and restrictions in its LLC agreement. The statute makes indemnity permissive and does not itself set a mandatory reimbursement, defense-expense advance, or special indemnity-insurance procedure. The agreement and general company powers govern the practical details.

State

Delaware

Statute checked

September 23, 2026

Sources

7 statutes

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At a glance

Governing LLC law and scope	6 Del. C. §§ 18-108, -106, -107, -1101: broad agreement-controlled indemnity power, general company powers and contract freedom
Covered people and capacities	Any member, manager or other person (§ 18-108); no express capacity link or former-status limit in that provision
Company-payment reimbursement	§ 18-107 permits member/manager loans and other transactions subject to agreement; § 18-108 addresses claims and demands
Indemnification and conduct limits	May indemnify and hold harmless against any and all claims and demands; agreement standards/restrictions control (§ 18-108)
Expense advancement and repayment	§ 18-108 states no separate interim defense-expense advance, undertaking or repayment condition; agreement may supply terms within general powers
Insurance purchase authority	General incidental and necessary/convenient company powers (§ 18-106(b)); § 18-108 states no special insurance/nonindemnifiable-conduct extension
Approval and court procedure	§ 18-108 prescribes no special disinterested vote, counsel determination or court application; ordinary management follows agreement or § 18-402 default
Agreement control and survival	Indemnity expressly subject to agreement (§ 18-108); maximum contract effect and duty/liability changes subject to implied-covenant limits (§ 18-1101(b), (c), (e)); coverage of any other person depends on the agreement and claim
What the statute does not decide	Agreement text, authority, claim, conduct, expense, and any insurance policy require case-specific review

Requirements one by one

Broad agreement-controlled indemnity

6 Del. C. § 18-108 says an LLC “may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.” The opening clause makes that permission subject to any agreement standards and restrictions. It does not itself make payment mandatory or specify a successful-defense, conduct, adjudication or repayment test.

Agreements, member transactions and management

Section 18-1101(b) directs maximum effect to freedom of contract. § 18-1101(c) allows agreement changes to duties without eliminating the implied contractual covenant of good faith and fair dealing; § 18-1101(e) also bars eliminating liability for a bad-faith covenant violation. § 18-107 separately permits member/manager loans and other transactions with the LLC unless its agreement provides otherwise. Under § 18-402, members holding more than 50 percent of profit interests control ordinary management by default, subject to the agreement. Those rules can matter when the company decides whether to pay a claim.

What trips people up

Section 18-107 treats member/manager loans and other company transactions separately from § 18-108's claims-and-demands indemnity. It does not spell out interim defense-cost advancement, a repayment undertaking or special indemnity approval procedure. Section 18-106(b) gives the LLC general incidental and necessary-or-convenient powers, but § 18-108 does not state a special insurance rule for nonindemnifiable conduct; actual policy coverage depends on its terms.

Common questions

Can someone other than a member or manager be protected? Yes. Section 18-108 expressly includes “other person,” subject to the agreement and the claim.

Must the LLC pay after a successful defense? Section 18-108 says “may,” leaving the answer to its governing documents and the particular claim.

Statutes and sources

6 Del. C. §§ 18-106(b), 18-107, 18-108: § 18-108 permits an LLC to indemnify “any member or manager or other person” against “any and all claims and demands whatsoever,” subject to agreement standards. Official current code, accessed 2026-09-23.
6 Del. C. § 18-402: default member management follows profit-interest percentages unless the agreement provides otherwise. Official current code, accessed 2026-09-23.
6 Del. C. § 18-1101(b), (c), (e): contract freedom and the implied-covenant limits on duty and liability changes. Official current code, accessed 2026-09-23.

Source links

Every statute quoted above, linked, with the date we checked it.

6 Del. C. § 18-106(b) · accessed 2026-09-23

6 Del. C. § 18-107 · accessed 2026-09-23

6 Del. C. § 18-108 · accessed 2026-09-23

6 Del. C. § 18-402 · accessed 2026-09-23

6 Del. C. § 18-1101(b) · accessed 2026-09-23

6 Del. C. § 18-1101(c) · accessed 2026-09-23

6 Del. C. § 18-1101(e) · accessed 2026-09-23

This page is general legal information about state LLC reimbursement, indemnification, expense advancement, and insurance statutes, not legal advice or a determination that any person is entitled to payment or coverage. An operating agreement, company records, the person's capacity and conduct, the nature and timing of a claim, and an insurance policy may change the answer. The table does not decide expense reasonableness, insolvency, tax treatment, policy terms, disputed facts, or a litigation outcome. Check the current statute and governing documents and seek licensed advice for a particular matter.

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