The Standards Board for Alternative Investments (SBAI), an association of alternative investment managers, occasionally publishes so-called “toolbox” memos on topics of interest to the alternative investment industry. For example, in 2020, it published a case study on potential conflicts introduced when fund managers operate parallel funds, suggesting relevant risk mitigation techniques. See our two-part series on that case study: Part One (May 5, 2020); and Part Two (May 12, 2020). This two-part series explores the key issues raised in the SBAI’s recent toolbox memo on indemnification and exculpation provisions in private fund governing documents and associated market practice, with insights from SBAI content/research director Maria Long; Christopher J. Dlutowski, partner at Morgan Lewis; James Oussedik, partner at Sidley Austin; and Nick Hoffman and James Smith, partner and counsel, respectively, at Harneys. This second article covers indemnification by investors; the interplay between indemnification and exculpation clauses and between indemnification provisions and insurance; the limited opportunity to negotiate indemnification provisions; and the role of side letters. The first article addressed key concerns with indemnification provisions and associated negotiating points; common indemnification terms and carve-outs; and jurisdictional differences in standards of care. See “Contractual Provisions That Matter in Litigation Between a Fund Manager and an Investor” (Oct. 2, 2014).