Countersign Hold Harmless (Indemnity) Agreement Made Easy

Digisign indemnification agreement

[Music] hi I'm Ken Fossum how would you respond to this superintendent's question I received two certified letters today one was from the company that installed our new bleachers a couple of years ago and the other is from the manufacturer of those bleachers both letters say the district is responsible for providing defense for them in the lawsuit that was filed Monday by the parents of one of the students injured when the bleachers collapsed last fall the school was named in Monday's lawsuit too but our insurance company is taking care of that I'm assuming the insurance companies for the Installer and manufacturer have the obligation to do the same for them am i right this question provides a limited amount of information and I suspect that there is more to the story more specifically I'm guessing as the school district may have entered into a purchase agreement when they bought the bleachers and that the purchase agreement had a clause in it that reads something like this paragraph 17 defend indemnify and hold harmless purchaser shall defend indemnify and hold harmless installer and manufacturer against any and all claims demands damages liability and costs incurred by installer and/or manufacturer for any act or omission of installer and/or manufacturer including but not limited to negligence gross negligence and faulty design or manufacturing as such relate to purchasers use of the product herein purchased so under paragraph 17 what did the district agree to do well generally speaking with regard to the word defend the school district agreed to provide the installer and manufacturer with defense attorneys and assume other litigation related costs associated with any claims described in paragraph 17 with regard to the words indemnify and hold harmless the school district agreed to reimburse the installer and the manufacturer for any damages they may be required by the court to pay to the plaintiffs there is no standard armed for defend indemnify and hold harmless provisions as a result some contract provisions are very limited and reasonable while others are very broad and unreasonable in fact some provisions have been so extreme that they have been ruled by the courts to be in violation of public policy rather than try to unravel the myriad of issues raised by today's original question let's focus instead on ways to mitigate or possibly eliminate such issues the message I'd like you to take away from our discussion today is to examine each contract with a watchful eye for one or more of the following words defend indemnify or hold harmless if you see any of these in a proposed contract review the language very carefully and in most cases have a conversation with your school attorney don't be surprised if your attorney suggests that you also have a conversation with your insurance agent or broker regarding the coverage available and more importantly the coverage that is not available to the district under the proposed contract language just as a side note here it is in my opinion important for the superintendent to avoid being the communications conduit between the lawyer and the insurance agent or broker instead I'd suggest arranging a three-way conference call to discuss the matter keep in mind that the attorney knows the law that the insurance agent or broker knows the district's policy and that you know the facts all three of these are critical to arriving at an appropriate decision as you proceed in your discussion with the attorney and insurance agent or broker keep in mind that there are five options available to you first you could attempt to have the clause deleted from the contract I've actually had sellers agreed without any further discussion to eliminate a clause in what they referred to as their standard contract just to secure the sale if that occurs for you simply draw a line through the paragraph then have the line out initialed by both you and the seller so it's clear both parties agreed to strike this language from the contract if option 1 doesn't work the second option is to negotiate the language in order to make it more acceptable to the district under this option it would be best for the attorney to do the negotiating and the drafting of the alternate language proposals if that option also fails the third option is to work with the insurance company to determine whether or not insurance can be purchased to cover the added risk if coverage is available at a reasonable cost you will have a viable alternative for consideration if not you can proceed to the fourth option which is to walk away on the surface that option might appear to be an easy choice in reality however it could present a very difficult one if the vendor is the only company capable of providing the specific product the district needs if the district is not willing to walk away and if none of the other options work and if the district absolutely positively needs the product and if it is willing to accept the additional contractual risk then the final option is to take a deep breath sign the contract and pray that the events noted in the defend indemnify and hold harmless clause never arise thanks to the attorneys with the Prairie law firm for their assistance in making these videos possible and thanks to you for watching see you next time [Music] [Applause] [Music] you [Music]