Represented as a percentage of the purchase price, the maximum amount that the buyer can claim back from the seller. Usually, the cap amount is equal to the escrow account or setoff amount.

Sometimes, however, the seller is willing to agree to a larger indemnification cap than the size of the escrow account, particularly for certain classes of claims.

Sellers almost always get some cap on their indemnification.

-Buying a small business, p.266