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Even though your business is covered by insurance, it’s best not to face third-party claims head on. This is what hold harmless agreement, also named a hold harmless contract, allows you to do.
This article enlightens you on hold-harmless agreement is and how it work in different businesses and states.
Understanding Hold Harmless
According to the International Facility Management Association : its“ An agreement in which one party consents to protecting the other from loss and to paying for the other party’s losses. Also called hold harmless indemnification agreement.”
So in a nutshell, A hold-harmless (indemnity) agreement is a contract entered into between two parties wherein one expressly agrees not to hold the other legally and financially accountable should injuries, losses, and damages be incurred.
What is a Hold Harmless Clause
Its a phrase or sentence included in a contract so that it has the nature of a hold harmless agreement. All contracts having a hold harmless agreement clause automatically put the signees into a hold harmless agreement.
What are the Different Types of Hold Harmless Agreement?
The following are the different types of hold and harmless agreement:
- Generic
- Property use
- Services
Generic Hold Harmless Agreement
A generic hold harmless agreement also known as general hold harmless agreement makes it possible for a business not to have legal liability for any injuries, property damage, or loss during an event.Usually, generic hold harmless agreement wording includes the following:
- Type of event covered
- Your name
- The other party’s name
- Effective date
- Specific incidents/situations where you’re held harmless
Property Use Hold Harmless Agreement
A property use standard hold harmless agreement negates your legal and financial liability whenever your rental property causes injuries, property damage, or losses to a client. Usually, the property use hold harmless wording includes the following:
- Your business’s name
- The client’s business’s name
- Type of property to be rented
- Perils regarding the use of the property to be rented
- A paragraph or phrase stating that any liabilities will not be faced by you
Services Hold Harmless Agreement
This removes financial and legal liability should something bad occur while you’re providing service to a client or a client’s customers.
The following are what you’ll commonly see in a service hold harmless clause wording:
- Your name or business name
- The client’s name or business name
- The type of service provided to the client
- The nature of the service provided
- Perils associated with the service provided
- A simple hold harmless agreement paragraph or phrase stating that any liabilities will not be faced by you but the client instead
Should I Sign a Hold Harmless Agreement?
If you’re the business, definitely sign a hold harmless agreement because it does the following:
- Helps you avoid liability when clients or third-parties become injured or experience property damage/losses
- Ensures that in case something happens, you don’t see your business defending itself in a court of law
- Safeguards your business’s reputation
- Allows you to do business with more confidence.
On the other hand, if you’re a client, do not sign if the business proposes a hold harmless agreement because:
- once signed, greatly hinders you from filing a claim against the business’s insurance
- The clause makes you shoulder the cost of your injuries, property damage, or losses if something bad happens
- It makes the business more confident to not provide the adequate service you need
Mutual Hold Harmless Agreement
Let’s say your business gets a service or product from another business for an event and vice versa; Will it be possible for you and the other business not to sue each other in case something bad happens? The answer to this is yes. One way to do so is through a mutual hold harmless clause.
A mutual hold harmless clause is just a variation of the usual hold harmless clause. The one defining characteristic is that once signed, both parties agree not to sue each other if injuries, property damage, or losses happen while a service is being delivered or a product or property is being used.
So how do you know if the hold harmless agreement is mutual? While reading a contract, always look for a hold harmless agreement example like this:
Both PARTY A and PARTY B expressly agree that, should injuries, property damage, or losses arise from the use of each other’s products, neither will file a claim or sue the other to get compensation for the costs incurred.
Sometimes, the wording of mutual indemnification and hold harmless agreement are fused into one clause and is called a mutual hold harmless indemnity agreement. The same is also true for mutual release and hold harmless agreement clauses.
Waiver of Liability and Hold Harmless Agreement: Are They the Same?
No. they are not the same.A liability waiver is a legal document that, once signed, makes the signer acknowledge that the other party doesn’t have any obligation for anything that might happen to them during the business activity.
On the other hand hold harmless agreement is a type of waiver of liability or release of liability together with the following:
- Event liability waiver
- General liability waiver
- Indemnification agreement
- Accident liability waiver
- Participation liability waiver
- Property liability waiver
- Personal injury liability waiver
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What is a Hold Harmless Letter?
A hold harmless letter is just another variation of the usual hold harmless agreement documents that businesses use. You can download and view any of the following sample hold harmless letter to see for yourself:
- RPVCA hold harmless letter sample
- Binghamton City School District hold harmless letter template fillable
Yoga Hold Harmless Agreement
Yoga teachers and students usually sign a hold harmless agreement with the yoga studio. This allows the yoga studio to remove any liability should the teacher or the student be injured while in the business premises.
In the same way, yoga teachers can also ask students to sign a hold harmless agreement to remove their liability for injuries caused by negligence or omission.
Car Rental Hold Harmless Agreement
Renters can file a claim should a car rental business provide a car that’s defective, which in turn causes injuries, property damage, or losses.
Car rental businesses often ask clients to sign a hold harmless form to negate their liability should the client experience something bad while using a rented car.
Employee Hold Harmless Agreement
A hold harmless clause in employment agreement contracts, if signed, allows the employer not to have liability should the employee get injured while on the job.
In simple terms, it voids the responsibility of the employer to provide workers’ compensation benefits. Otherwise called a workers compensation hold harmless agreement.
Vendor Hold Harmless Agreement
A vendor hold harmless agreement is signed so that event organizers don’t face liabilities should the vendor get injured or experience property damage while participating in an event.
Furthermore, it ensures that should the vendor have liabilities, the event organizers won’t be involved in the fray.
Hold Harmless Agreement Landlord Tenant
Landlord tenant hold harmless agreement protects the landlord from any liabilities connected to the tenant’s use of a leased property.
Stadiums, gyms, swimming pools, villas, and other businesses renting out property ask clients to sign landlord tenant hold harmless agreement.
Food Seller Hold Harmless Agreement
Food sellers ask clients to sign a hold harmless for avoiding liabilities should issues arise regarding food poisoning or improper food preparation practices. If signed as a mutual contract, the food seller also agrees not to sue clients should issues arise.
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Heavy Equipment Lease Hold Harmless Agreement
Heavy equipment businesses include a lease hold harmless clause in their contracts with different clients. When a hold harmless lease agreement for heavy equipment is signed, the lessee can’t sue the lessor should property damage or personal injuries be incurred.
Property Owner Hold Harmless Agreement
A hold harmless agreement for property owner allows the owner to be immune from liabilities should damage be incurred to a rented property. If signed mutually, property hold harmless agreement also prevents the renters from suing the owner.
Automotive Hold Harmless Agreement
Automotive shops might be liable for the damage of their clients’ car or injuries to the clients themselves as caused by errors and omissions. And so, most craft a harmless auto repair contract.
Once signed, the automotive shop becomes immune from liabilities that arise during the service and after the service.
What is a Hold Harmless Agreement In Real Estate?
Real estate hold harmless agreement makes a real estate company, agent, or seller immune from liabilities should a client find issues in the real property before occupancy, during occupancy, and after occupancy.
So how is hold harmless clause real estate drafted? There are many variations as to how this is done. But to give you a quick reference, Take a look at this real estate indemnification clause sample from Law Insider:
The Seller shall protect, defend, indemnify and hold the Purchaser and the Issuer and their respective assigns and their attorneys, accountants, employees, officers, and directors harmless from and against all losses, costs, liabilities, claims, damages and expenses of every kind and character
hold harmless agreement real estate sample documents can be downloaded online and used. Here are some:
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Hold Harmless Agreement Florida Real Estate
Hold harmless agreements are generally valid when purchasing a real estate in Florida. However, a broad form hold harmless agreement is prohibited. With that said, all provisions of the contract must state what specific situations or conditions will there be immunity from liability.
Hold Harmless Agreement Construction
A hold harmless clause in construction contract is very common. It’s used in different building projects such as roads, buildings, bridges, and more.
Construction hold harmless agreement protects the construction company from liabilities should there be an accident that causes injuries or property damage to the client. Furthermore, hold harmless clause construction prevents lawsuits if errors and omissions are committed.
Contractor Hold Harmless Agreement
Contractors use a hold harmless agreement to avoid having liability over the actions of their subcontractors and other related third parties. Follow the links below to download a sample hold harmless agreement for contractors:
- Small contractor hold harmless agreement template from Diocese of Charlotte (no longer available)
- Hold harmless clause example contractor from Arlington
Contractor hold harmless agreement can be classified as:
- Subcontractor agreement
- General contractor agreement
- Independent contractor agreement
- Hold harmless agreement between contractor and owner
Subcontractor Hold Harmless Agreement
This type of agreement makes a subcontractor assume liability for his or her actions. Once signed, the contractor that hired the subcontractor isn’t obligated to pay for injuries nor defend the subcontractor in court.
Majority of contractors prepare a subcontractor agreement with hold harmless clause when working on big projects.
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Indemnification vs Hold Harmless
Hold harmless and indemnity agreement serve the same function. That is, once a party agrees to indemnify and hold harmless, they accept that the other party isn’t liable for any injuries, property damage, and losses arising from a service, use of property, or delivery of a particular product.
Indemnification vs hold harmless agreement, the bullet below summarizes the main difference:
- Hold harmless agreement provides protection from actual liability and potential liability to losses of another party
- Indemnification agreement only provides protection from actual liability to the losses of the other party
In a nutshell, as per the statements above, the main difference between hold harmless and indemnify is that the former has a broader scope than the latter.
Release and Hold Harmless Agreement
Release and hold harmless clause go together in contracts and will be stated as, ” CLIENT agree to release and hold harmless BUSINESS from personal injuries, property damage, or losses”.
How Does Hold Harmless Agreement Work in Different States?
Hold harmless agreements work differently in each state. For instance, some treat generic waiver of liability and hold harmless agreement as the same thing while others don’t.
Hold Harmless Agreement California
Release of liability and hold harmless agreement are treated as the same thing in California. That said, if you’re selling a house in the state, you can use a release of liability form or hold harmless agreement form to protect yourself from lawsuits after the client purchased the house.
Texas Hold Harmless Agreement
In Texas it provides immunity to one party only or both parties. Unlike Maryland, Texas doesn’t put exclusions on the legality of hold harmless agreements. Download Texas agreements through these links:
- Hold harmless agreement Texas template from A&M University
- Dallas City Hall hold harmless agreement Texas pdf
New York
Hold harmless agreement NY is legal. However, New York state’s provisions only allow so to some extent. For example, agreements in construction are void under New York’s General Obligations Law § 5-322.1.
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Where to Get Hold Harmless Agreements?
No hold harmless agreement documents are out of reach with the help of the internet. if you’re looking for websites that allow you to customize a hold harmless liability template easily, then we recommend:
Legalzoom
Legal zoom allows you to buy indemnification, release, and hold harmless agreements easily. All you have to do is search its database to find what you’re looking for.
Public Legal
This website has legal forms hold harmless agreement, borrowing agreements, lending agreements, and more. Be prepared for some work because this website’s design isn’t very intuitive.
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Related Questions
Do All Businesses Sign a Hold Harmless Agreement?
Not all businesses sign a hold harmless affidavit with their clients. Actually, this is only for businesses that provide a particular service e.g. catering, rent a business property or equipment e.g. car rental or venue rental), and host events e.g. a disco, a gaming hub.
Navy hold harmless agreement voids the liability of the U.S. navy for any personal injuries, property damage, or losses that might happen in any sponsored training or events. A copy can be obtained here.
Does the US Have a Hold Harmless Act?
The United States and its states don’t have any hold harmless acts. The legality of hold harmless agreements is left for the court’s interpretation.
