Ensuring the Legality of eSignatures for Hold Harmless in the United States

How to eSign a document: e-signature lawfulness for Hold Harmless in United States

[Music] hey everybody i'm rob freeman and welcome back to ensuring the built environment this week we're answering the question what is a hold harmless and why is it important in the world of insurance well a hold harmless is a common legal clause that you'll find in contractual agreements that are between multiple parties so you may have an example would be like a lease between a landlord and a tenant or another example would be in a construction agreement between say an owner and a general contractor or subcontractor or all three and what a hold harmless does is it essentially shifts responsibility away from one party onto another party and it's a very common thing to find in a lease for instance in if you have a lease in an office building you may find there's a clause in there which says something to be effective the tenant agrees to indemnify defend and hold the landlord harmless in the event of any claims of bodily injury and property damage that might arise out of the tenant's operations and so what's happening in that situation is that the tenant is taking full responsibility for anything that arises out of the tenant's operations and if there was a claim like say a visitor to the tenant's space went in and tripped over a power cord and injured themselves say they chipped a tooth or something happened whatever and um they filed a lawsuit against the tenant and they also filed a lawsuit against the landlord well in that case the landlord is going to tender that lawsuit back to the tenant and say hey you agreed to hold me harmless read this clause here you take care of it and that so would be an example of how hold harmless will work and there's several types of hold harmless agreements you have a unilateral hold harmless where one party is agreeing to hold the other harmless then you have a bilateral hold harmless or what they call a mutual hold harmless where both parties are agreeing to hold each other harmless and not sue each other or just take responsibility for whatever arises as a result of their agreement and then you also have different types of hold harmlesses that vary by breadth so you might have a limited form hold harmless where uh the party is taking some responsibility but not not all you have an intermediate and then a broad form where under the broadest type of hold harmless maybe where the the one party is agreeing to take responsibility for anything that happens even if it results purely from the negligence of the other party and that type of broadhold harmless could even be illegal in some states so it's important to kind of think through the language of a hold homeless very important to have a hold harmless in any contracts when it comes to insurance and you should work with your insurance broker to make sure that that language is in your lease or your contracts and because it can happen that the in order to get good insurance the insurance carrier is going to ask for a copy say in a construction agreement the insurance carrier is going to ask for a copy of the agreement between the owner and the general contractor or the subcontractor and they're going to look for hold harmless language in favor of their insured and what that means is that the the insurance company sees that as a good risk management practice because that's going to reduce the risk that the insurance carrier is going to be named in a lawsuit and may be found liable for or their their insured might be find found liable for something that they didn't really cause so in the case of a construction project say a landowner hires a general contractor to build a building the contract between the landowner and the general contractor should have a hold harmless in favor of the landowner in the event that somebody who's building who's hired by the gc to build this building is injured on the job and then fire fires a lawsuit off to the land owner and the lender is like well i was just i just hired this guy i wasn't even involved you deal with it and so that's where that cold harmless language comes in and it can be very valuable in not only protecting you from a lawsuit but also helping you reduce your insurance costs so anyway that's what a hold harmless is it's something that is a common risk management practice and a common legal clause that you find in many contracts so if you have questions about contractual indemnification or hold harmless language in a contract that you're working on feel free to schedule an appointment with me if you're working on an enlarged insurance project and you need to talk to somebody about this language happy to try to help my look forward to talking to you and feel free to schedule an appointment with me at the link below i hope this is helpful and have a great day