Hold Harmless Agreements - The basic principles
Hold harmless agreements and Indemnity agreements can be very tricky in your small company insurance program. One of many key things to remember in signing any agreement is always that in the United States you cannot sign away your rights. These hold harmless agreements and indemnity agreements will limit your skill for compensation and recourse. It could be in your best interests once you negotiate your contracts that you have mutually beneficial hold harmless agreements. By doing this, you will not arbitrarily provide coverage in your vendors and/or clients for their acts of negligence.
Haphazardly signing hold harmless and indemnity agreements without checking ramifications can cost you big money in the long run. By signing these kind of agreements you can extend your coverage from the policy to other parties. Thus any claims which can be paid and any and all claims expenses which can be incurred will be tallied to your loss ratio on the policy even though you don't have any negligence whatsoever. So you could be paying for this agreement via claim payments yourself policy for many years to come. The insurance coverage companies typically will surcharge your insurance policy for a minimum of three years in order to recoup their losses.
Hold Harmless Agreements have become common and are within almost all contracts. Correctly ascertaining whether your insurance coverage will respond to that which you have agreed to in some recoverable format and the hidden costs of claims which will affect your premiums are all items to consider in your overall enterprise risk management.