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Are you protecting your company with hold harmless agreements?

Hold Harmless and Indemnification Agreements, can be critical parts of any contract. These agreements are drafted to shift the assumption of liability from one party to another.

The typical parties to an indemnification relationship are the Indemnitor and Indemnitee. The indemnitor typically assumes any liability or the obligation to hold the indemnitee harmless from liability.

Hold harmless agreements are often classified as broad form, intermediate form and limited form. The most common type of hold harmless agreement is the limited form.

However, for your information, a brief description of the three
types of hold harmless agreements follows:

Limited Form Hold Harmless Agreements
This type of hold harmless agreement is sometimes referred to as a comparative fault indemnification agreement. As its name implies, this agreement obligates the indemnitor only to the extent of his or her own fault.

Intermediate Form Hold Harmless Agreements
In this situation, the indemnitor assumes all liabilities of the indemnitee relating to the subject matter of the agreement, except where the injury or damage is caused by the indemnitee’s sole negligence. Any amount of fault on the part of the indemnitor under an intermediate hold harmless agreement obligates the indemnitor to indemnify the indemnitee for the total amount of damages. For example, whether the indemnitor is 10 percent or 90 percent at fault, it nevertheless must indemnify the indemnitee for 100 percent of the damages. The only instance in which the indemnitor is relieved of the contractual obligation to indemnify is when the loss is due solely to the fault of the indemnitee.

Broad Form Hold Harmless Agreements
Broad form hold harmless agreements require complete indemnification of the indemnitee for all occurrences arising out of the indemnitor’s operations without regard to fault.

If you are not protecting your business with hold harmless agreements, you are playing with fire. If you would like a copy of a limited form hold harmless agreement send me an email or call the office.

To Your Success!
Rod Hanks

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