California Hold Harmless Agreement: What You Need to Know
A California hold harmless agreement is a clause releasing one party from liabilities or consequences due to the actions of the other party.3 min read
Updated July 13, 2020:
A California hold harmless agreement is a clause in a contract in California releasing one party from liabilities or consequences due to the actions of the other party.
Hold Harmless Agreement Clause
Hold harmless agreements are commonly used in contracts for construction. In this application, a subcontractor would provide a hold harmless agreement to the builder, contractor, or other professional to provide insurance against the work performed by the subcontractor. This agreement's provisions help to minimize legal action between two parties involved in a contractual relationship, including indemnity claims or litigation if a subcontractor or one of its employees was injured while working on the job. In a contract, the hold harmless agreement must include specific language to provide protection to the intended parties or the contractor.
This agreement must also outline any provisions to neglect:
- Other cause of action
These provisions would become important to the contractor if any disputes or problems were to arise during the job.
The protection granted under a hold harmless agreement varies, depending on the jurisdiction in which the contract is signed and executed. A hold harmless agreement could protect a contractor from any claims brought up by companies or corporations that aren't necessarily part of the agreement.
When to Use a Hold Harmless Agreement
If any of the following may apply, a hold harmless agreement could be useful:
- You don't want your activities to allow for someone else to be sued.
- You are granting access to someone else to use your facility or property and wish to protect against any liabilities or damages caused by the other person.
- A company or person will provide services for you, and you want to protect against liability if that person or employee of the company is injured while providing the services.
A hold harmless agreement is also called a:
- Hold harmless letter
- Release of liability
- Hold harmless release
- Waiver of liability
- Hold harmless
Three Basic Types of Hold Harmless Agreements
There are three main types of hold harmless agreements. The first main type of hold harmless agreement is a broad form hold harmless agreement. In this agreement, a subcontractor is providing proof of insurance and that insurance provider will assume liability for accidents and accidents, both by the subcontractor and contractor. Since this type has such broad terms, many jurisdictions don't allow contracts to include the broad form agreement, and it is not recommended for maximum protection. A subcontractor may be required to obtain another insurance policy to finance its liability for validation of a broad form hold harmless agreement.
The second type of hold harmless agreement is the intermediate form type. With this type, a subcontractor assumes liability for any negligence and accidents. All related actions of the subcontractor are his responsibility, but the subcontractor is not liable for negligence or accidents that fall under the responsibility of the general contractor. This type is the hold harmless agreement used most often.
Its terms don't depend on whether the subcontractor is at fault. Instead, the terms of this type of agreement only depend on who acted in a negligent manner or executed an accident. If both parties are deemed to be negligent, the subcontractor is liable for any omissions and responsible for any actions.
The final type of hold harmless agreement is limited-form. This type only holds the subcontractor accountable for a limited form of negligence or accidents. Only the proportion of the accident or negligence that is the fault of the subcontractor would be his responsibility. In this type of agreement, the other associated hold harmless agreements would outline all parties' responsibilities for negligence or accidents.
Items to Include on Hold Harmless Agreement
A hold harmless agreement should include specific language to be considered valid and legally binding. The contract issuer or insurance company can provide the required language.
Any hold harmless agreement should be one of the following options:
- Terms definition
- Failure to defend
- General provisions
- Notice of claim
- List of exceptions for indemnification
- Authorization of indemnification
- Governing law
- Assumption of defense
- Settlement and consent (for all involved parties)
- Rights and obligations (of all involved parties)
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