A Hold Harmless Agreement is a statement that an individual or organization should not be held responsible or liable for injuries or damages caused to one or more individuals signing the contract. This agreement is most often a clause in a larger legal document.
The most common example of a hold harmless agreement is a document when a physical participant, such as a runner in a marathon, agree not to hold the organization in charge responsible for the participant’s injuries or death. The participant agrees to take responsibility and liability if they become injured during the course of the marathon.
Types of Hold Harmless Clauses
- Limited Clause. This states that Party A will hold Party B harmless for any injuries or potential lawsuits arising from Party A’s negligence. These are used in business transactions in which a third party such as a contractor wishes not to be held responsible if the partner business does something wrong.
- Intermediate Clause. This clause alleges that Party B will not be held responsible for lawsuits arising from sole negligence of Party A or if both parties are held responsible for negligence.
- Broad Form Clause. Regardless of who is responsible for lawsuits alleging negligence – Party A, Party B, or both parties – Party B refuses to accept responsibility, and Party A takes on all responsibility.
How is it Used?
Hold harmless agreements can exist for any reason to prevent lawsuits or liability accusations if a third party is injured by the activities of two or more parties. For example, if you hire a lawn maintenance company to completely re-landscape your lawn, and you do not want your neighbor to sue you for negligence if they are injured by the contractor’s equipment while on a walk, you sign the agreement with the lawn maintenance company that they will accept all responsibility in the event of a third party injury.
Research state law regarding hold harmless agreements before signing one or filling one out. Some provisions in standardized forms may not be admissible in court in various states. If you are asked to sign as a way of accepting responsibility, you should also understand the legality of the document you are looking at before you agree to it. Some states prohibit hold harmless agreements in specific professional situations.
If you are going to sign a hold harmless agreement, consider purchasing insurance, especially if physical labor is involved. Business insurance can help cover any pain, suffering, injury, death, or other losses that occur and can sometimes help prevent lawsuits.
If you create a hold harmless agreement or clause in a legal document, be as specific as possible about what you do not wish to be held liable for. Many states look unfavorably on statements in hold harmless clauses that are too broad, and many courts will not uphold broad agreements between parties. If you have questions about how broad a hold harmless agreement is, consider consulting an attorney regarding liability.