What does Hold Harmless Mean?

 In Commercial Insurance

What does Hold Harmless Mean?

Assumption of liability through contractual agreement by one party, thereby eliminating liability on the part of another party. An example is a railroad sidetrack agreement with a manufacturing company under which the manufacturer is held harmless for damage to railroad equipment and tracks.

What is a Hold Harmless Agreement?

An agreement or contract in which one party agrees to hold the other free from the responsibility for any liability or damage that might arise out of the transaction involved.

For example, a company might agree in an employee’s contract to pay the judgment if the person is successfully sued for injuries sustained by a plaintiff if the employee is acting within the scope of his or her authority on company time.

In certain cases, particular parties may not, however, be exempted from liability. For example, a provision exempting a common carrier from all liability for loss would ordinarily be void, as against public policy.

Hold harmless agreements are ordinarily contained in leases and easements. 

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