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Last edited 30 Jan 2021
Hold harmless agreement
In the United States, a hold harmless agreement is a clause typically included in construction contracts, in order not to hold one party liable for the acts of the other. It can be a unilateral or reciprocal agreement and is commonly provided by a subcontractor to the main contractor.
The provisions of such an agreement mean that the risk of being held liable for loss or damage due to the actions of another are minimised and a claim for indemnity can be pursued. In terms of a reciprocal agreement, both parties are covered, i.e. the subcontractor will not be held liable for loss or damage caused by the main contractor and vice versa.
The protection provided by the agreement varies according to the jurisdiction, but in general, they must include an express indemnification, that is, a written agreement that secures or protects a person/party from the legal responsibility of a loss. The named party who that takes responsibility is known as the ‘indemnitor’ while the named party to be protected is known as the ‘indemnitee’.
There are three basic types of hold harmless agreements:
- Broad form: This type holds that the indemnitor will assume all risk for liability regardless of whether responsibility lies with the indemnitee.
- Intermediate form: This is the most commonly used type and holds that the indemnitor will assume all risk for liability unless responsibility lies solely with the indemnitee.
- Limited form: This type holds that the indemnitor will only assume the risk of liability for loss caused by their own actions.
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