Hold Harmless Agreement

What Does Hold Harmless Agreement Mean?

A hold harmless agreement is a clause in a contract that relieves one party of liability, with the consent of a second party, who then assumes legal responsibility for any damage or injury.

It is also referred to as the hold harmless provision or hold harmless clause.

Insuranceopedia Explains Hold Harmless Agreement

A hold harmless agreement is created when one party asks another to perform a task that involves some level of risk. For example, a company might hire a contractor and include a hold harmless provision in the contract to absolve itself of responsibility for any damage or injury resulting from the contractor’s work. In a broad hold harmless agreement, the contractor could even be held responsible for mistakes that would typically be attributed to the company.

Contractors who sign these clauses usually carry their own independent contractor business insurance so they can pay out claims they have contractually accepted. The hiring company often keeps general liability insurance in place to cover anything the agreement does not transfer.