Hold Harmless Agreement

According to Ray Burnham’s Insurance Dictionary (www.BurnhamSystem.com), a hold harmless agreement is a “contractual provision in which one party assumes another’s legal liability, as a contractor may assume an owner’s liability based on the contractor’s actions; is another term for indemnity agreement.”

I use the phrasing, “When one party agrees to take the bullet for another party,” when describing hold harmless and indemnity clauses.”

Use caution when agreeing to assume liability for someone else. While many insurance contracts will follow you in such agreements, some will not. Further, if the agreement is too broad, you could be assuming liabilities that your insurance does not cover. For example, pollution is excluded from most liability insurance policies. However, your indemnification agreement may may you liable for pollution liabilities.