Hold-Harmless Agreement

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Hold-Harmless Agreement A risk transfer mechanism whereby one party assumes the liability of another party by contract. Therefore, one party agrees to release the other party from any liability for damages that may occur as a result of the activities of the first party. A hold harmless clause is used to protect a party in a contract from liability for damages or losses. Hold harmless agreements are often used in business transactions, such as when a company hires a contractor to perform work on its property. The company may require the contractor to sign a hold harmless agreement in order to protect itself from any liability for injuries or property damage that may occur during the course of the work. In signing such a clause, the other party accepts responsibility for certain risks involved in contracting for the service. In some jurisdictions, the use of a hold harmless clause is prohibited in certain construction jobs. Three types of Hold Harmless agreement: Broad Form: With this type of agreement, a subcontractor being insured assumes all related liability for accidents, its own negligence, general contractor negligence, and the combined negligence of both the contractor and subcontractor. Intermediate Form: Under this form of agreement, a subcontractor assumes all liability for accidents and negligence. Limited Form: In this agreement, a subcontractor will be held accountable only for the accident or negligence, but on a limited form. Hold harmless agreements are not always enforceable. For example, if a hold harmless agreement is found to be unfair or unreasonable, it may not be upheld in court. Additionally, if a party breaches a hold harmless agreement, the other party may be able to sue for damages. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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