Hold Harmless and indemnification provisions are commonly found in contracts involving lease of premises, construction, and the sale of a product. These provisions are attempts to contractually alter the contribution or sharing of liability between two or more tortfeasors under the law of negligence.

The most common types of hold harmless / indemnification provisions are as follows:

Limited — requires each party to be responsible for its own negligence. This is the most equitable form.

Intermediate — requires the first party to be responsible for all the negligence of both parties if the first party is either solely or partially negligent (could be as little as 1%). This is the next most equitable form.

Broad — requires one party to accept responsibility for all negligence even when the other party is solely negligent. This is the least equitable form.

The most controversial issue is whether a party is entitled to be indemnified when it is negligent in whole or in part.

Despite the intentions of the drafter, these provisions may not be enforceable by the courts due to poor drafting, a statute prohibiting their use under certain situations, failure to include specific language as required by statute, or case law.

In the context of construction contracts, courts have taken the following differing positions:

* An agreement to indemnify a party for its own negligence must clearly or unequivocally evidence such intent by both parties

* A party can’t be indemnified if it was partially negligent

* A party can’t be indemnified for its sole negligence

* The entire provision may be stricken if any part of it is unenforceable

* Only the unenforceable provision in the indemnification will be stricken

In the context of commercial lease agreements, courts have taken the following differing positions:

* Explicit language may be required to show that both parties (tenant and landlord) intended for the landlord to be indemnified when the landlord was partially negligent.

* Most states allow for the landlord to be indemnified when partially negligent.

* Some states have statutes that prohibit the landlord being indemnified for its sole negligence.

* The provision “to the fullest extent permitted by law” may serve to save the enforceable parts of such provision but such a result is not guaranteed.

For the purposes of insurance coverage, the type of liability that is triggered by indemnification and hold harmless provisions is know as contractual liability which may be covered under a General Liability policy.

Source: Margaret Suuberg, Speaking The Language Of Indemnity, Risk & Insurance Magazine, April 2011