Hold Harmless Agreement Explained
Hold Harmless Agreement def:
A hold harmless agreement is a provision in a contract that requires one contracting party to respond to certain legal liabilities of the other party. For example, a hold harmless agreement in construction contract typically requires the contractor to indemnify the owner with respect to the owner’s liability to members of the public who are injured or whose property is damaged during the course of the contractor’s operations. There are a number of types of hold harmless agreement clauses, differentiated by the extent of the liabilities they transfer. The most commonly used types of hold harmless agreement clauses are the “broad,” “intermediate,” and “limited” form hold harmless clauses.
- Limited Form Hold Harmless Agreement—Where Party A holds Party B harmless for suits arising out of Party A’s sole negligence. Party B is thus protected when it is held vicariously responsible for the actions of Party A.
- Intermediate Form Harmless Agreement—Where Party A holds Party B harmless for suits alleging sole negligence of Party A or negligence of both parties.
- Broad Form Hold Harmless Agreement—Where Party A holds Party B harmless for suits against Party B based on the sole negligence of A, joint negligence of A and B, or the sole negligence of B. Broad form hold harmless agreements are unenforceable in a number of states.
A well structured contract can be a highly effective way to reduce risk in your business. Speak to an ALIGNED Insurance Advocate for more details or connect with us at www.alignedinsuranceinc.com today.
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