Hold Harmless Agreements
A hold harmless agreement is a contract by which legal liability for damages of one party is assumed by the other party. One party agrees to hold the other party harmless (and usually indemnify) from the liabilities associated with the hazards of a particular activity or venture. Contracts may contain a hold harmless clause.*
Because a hold harmless agreement does not rule out the possibility of a lawsuit, its practical value is limited by the ability of the executing party to pay expenses that arise. A hold harmless agreement from an entity with no assets and no insurance is nearly worthless. For this reason, hold harmless agreements are frequently conditioned on proof of insurance coverage. The entity promising to pay must provide proof that it has insurance to cover any claims that may arise. For complete protection, the insurance policy must include coverage for liability assumed under contract. As a fallback position, a certificate of insurance will at least verify that the entity carries insurance up to some specified limit. If primary liability is likely to be assessed against that entity rather than the organization, this certificate provides almost as much assurance as a hold harmless agreement.**
When Should You Request a Hold Harmless Agreement?
You should request hold harmless agreements, along with certificates of insurance, from outside groups, contractors and vendors conducting activities or performing work on your premises, as well as from non-diocesan service organizations like the Knights of Columbus, the Red Cross, Alcoholics Anonymous and the Boy Scouts.
When requesting a certificate of insurance, require that the Roman Catholic Diocese of Brooklyn, Nicholas DiMarzio as the Bishop of Brooklyn, and the Parish or Agency be named as Additional Insured with $1,000,000 minimum liability coverage and $3,000,000 aggregate.
What if Our Parish is asked to Sign a Hold Harmless Agreement?
All contracts that contain indemnification clauses or hold harmless agreements must be submitted to the Diocesan Insurance Office for review prior to signing. Also, contracts that include language regarding additional insured status to others must also be reviewed by the Insurance Office.
* "Glossary of Risk Management & Insurance Terms” 2, June 2012. Not for Profit Risk Management Center
** “About Waivers and Releases” 2, June 2012. Not for Profit Risk Management Center