A hold harmless agreement, also called an indemnification clause, is a contract provision in which one party (the indemnitor, usually a tenant or vendor) agrees to assume liability for specified claims and to defend and reimburse the other party (the indemnitee, usually the owner or manager). Insurance requirements exist to make sure the promise can be paid.
The insurance clause in a lease or vendor agreement is the visible part. The hold harmless clause next to it is what the insurance is for. The IRMI definition describes it as a contractual arrangement whereby one party assumes the liability inherent in a situation, relieving the other party of responsibility; Cornell's Legal Information Institute gives the legal background.
The three forms
| Form | Indemnitor covers | Where it appears |
|---|---|---|
| Broad | All claims, including those caused solely by the indemnitee | Increasingly restricted by statute |
| Intermediate | All claims except those caused solely by the indemnitee | Common in leases and service contracts |
| Limited (comparative) | Only claims to the extent of the indemnitor's own negligence | Construction in states that limit indemnity |
Which form is enforceable varies by state or province and by contract type; anti-indemnity statutes in many US states restrict the broad form in construction agreements. The clause should be drafted with counsel and then matched to the insurance requirements.
Why buildings pair it with insurance
A vendor that promises to indemnify the owner for a worker's injury can only keep the promise if it has the money. That is what commercial general liability coverage for contractual liability provides, and what additional insured status with primary and non-contributory wording turns into a direct claim on the vendor's insurer rather than a lawsuit against the vendor. A waiver of subrogation closes the loop by stopping the vendor's insurer from coming back against the building.
The checklist item
At onboarding: signed agreement with the indemnity clause, insurance clause naming the parties and limits, and certificates plus endorsements that match. The clause without the insurance is a promise from a company that may not be there when the claim arrives.
Related terms
Frequently asked questions
What is the difference between hold harmless and indemnify?
In practice the terms travel together. Indemnify means to reimburse the other party for a loss; hold harmless means to protect them from liability for it in the first place; defend means to pay for and manage the legal defence. Well-drafted clauses use all three so there is no argument over which was intended.
What are the three forms of hold harmless agreement?
Broad form, where the indemnitor covers all claims including those caused solely by the indemnitee; intermediate form, where it covers claims unless caused solely by the indemnitee; and limited form, where each party covers only its own negligence. Many states restrict broad form clauses, especially in construction.
How does a hold harmless agreement relate to insurance?
The clause is a promise; the insurance is the money behind it. General liability policies cover liability assumed under an insured contract, which is why leases and vendor contracts pair the indemnity clause with additional insured, primary and non-contributory, and waiver of subrogation requirements.