I like hold-harmless agreements. Basically, they say I will not sue you and you will not sue me.
I don’t like indemnification agreements. Basically, they say if you get sued I’m supposed to defend you and pay any award against you.
In the absence of an indemnification agreement, you pay your liabilities and I pay mine. You buy insurance (or not) and I do too (or not).
A hold-harmless says I trust you and you trust me.
An indemnification agreement says you can’t trust me and I can’t trust you.
Unfortunately, the lawyers of the world have convinced most of us that we should demand indemnification. They write contracts where the party with the power (the biggest, the most lawyers, the one with the product or service you REALLY need) sets the terms of the agreement.
Here is where my lawyers tell me that I need to tell you that I am not a lawyer.
Your insurance largely does not care what agreements you sign. Some liability policies allow for contractual assumptions of liability (indemnification). For example, you can set up most general liability policies to indemnify your landlord (if required by a lease). Such allowance does not change your insurance policy’s exclusions.
For example, if your lease says you will indemnify your landlord for ALL liabilities your insurance still excludes pollution. Your lease may make you responsible for pollution liability, your insurance is not changed by the lease. Tough luck!
The larger problem comes in when we are talking professional liability, directors and officers liability, and cyber liability.
It is fine and dandy if your software contract says you will indemnify the software company. Your cyber liability insurance still only protects you!
Your insurance is your insurance. Any indemnity you will be providing is going to come from you, not your insurance company.
In many cases, you are unable to change the terms of the contracts you must sign in order to get something you want. Understand that your insurance largely does not care.
