Every business owner needs to make sure their business is free from accidents. But even if you have made the necessary precautions, an unwanted event can happen at any time. If you have a business that involves physical activity, you must protect your business from lawsuits. The best way you can do this is with a hold harmless agreement (HHA).
This article will teach you how to create a hold harmless agreement and how you can get protected from it.
Table of Contents
5 Essential Elements of Hold Harmless Agreement
There are five important parts that you should remember to include when you are writing a hold harmless agreement. These include the following:
Your agreement should include the other party’s obligation to defend and indemnify Party A. Since there is a distinction between indemnity and defense, a bare indemnity agreement does not need a defense for a claim to be made.
The agreement should include the word “negligence” or a similar contract language so that the party can be indemnified for its negligence.
Public Policy Considerations
Some states follow statutes that prohibit any attempt to indemnify Party A from the results of his ‘sole negligence’. This is usually followed in a building structure’s construction, maintenance, repair, or alteration. Agreements from other industries may fall within the prohibition.
To stop an indemnity clause from being unenforceable, a disclaimer should be construed requiring Party B to indemnify Party A from his negligence.
You must check if the other party has included contractual liability coverage in his liability insurance policy as well as the other required insurance coverages. This is because there are a lot of general liability insurance policies that do not provide coverage for indemnity agreements.
Courts and parties usually disfavor indemnity agreements since they are deemed unfair. If you wish to mitigate or alleviate objection, you can make the indemnity proportional; which is a fairer concept between two parties.
Download the Hold Harmless Agreement Form
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Hold Harmless Agreement
Step-by-Step Guide On How To Write A Hold Harmless Agreement
Before understanding the process of hold harmless agreement creation, you need to know the different types available. These agreements generally fall into three categories, which include the following:
A general hold harmless agreement protects you from legal action related to a particular activity. Since the legal protection is narrowly framed, it will only apply to that specific activity or event.
When you are performing a defined service, you can protect yourself from liabilities that may occur to someone. This is the type of agreement that is usually signed between a construction contractor and his employer.
You can protect yourself from any lawsuit that someone incurs while using or renting your property. This is the type of agreement that homeowners and small business owners sign.
Best Practices When Writing A Hold Harmless Agreement
Now that you know how to write a hold harmless agreement, the next tip is to know the best practices to make the agreement enforceable and legal. Some of the important details that should be in the agreement are:
- The agreement date
- The name and address of the protected individual
- The name and address of the other party
- Details about the event or activity of the agreement
- Details about the location and who is hosting the event or activity
- The date wherein the agreement starts and its duration
- The signatures of both parties and the date signed
An HHA requires the use of specific language. This is why it is best that you speak to an attorney to help you prepare one.
How To Use Fill To Write Hold Harmless Agreement
Thankfully, there are document management software tools that you can use to help you when you’re drafting a hold harmless agreement. Fill is one of the tools you can use to create a draft agreement.
You can register for a free account to check out our available HHA templates.