Lenders & Contracts · Insurance Term
Hold Harmless Agreement (Hold Harmless Clause)
Definition
A hold harmless agreement is a contract clause where one party promises not to hold the other responsible for certain losses or claims, and often to pay those costs. Leases, vendor contracts and construction contracts commonly include one.
In Plain English
Hold harmless clauses shift risk between the parties to a contract. A tenant may agree to hold the landlord harmless for injuries in the leased space. A contractor may agree to hold the owner harmless for claims arising from its work. The clause is usually paired with an indemnity promise to pay or defend claims.
How far the clause reaches depends on its wording. A limited version covers only claims caused by the promising party. A broad version tries to cover claims even when the protected party was partly or fully at fault. Liability policies often cover some of these promises through contractual liability coverage, but only for agreements that fit the policy's definition of an insured contract.
A hold harmless clause works best with insurance behind it. That is why contracts often also require the other party to name you as an additional insured on their liability policy.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: a landscaping company signs a contract agreeing to hold an office building owner harmless for injuries from its work. A visitor trips over a hose left on a walkway and sues the owner. The clause, along with additional insured status on the landscaper's policy, may shift the defense and payment to the landscaper and its insurer.
Why It Matters for Texas Property Owners
Texas courts generally require a clause that shifts responsibility for the other party's own negligence to say so expressly and to be conspicuous in the contract. For construction contracts, the Texas Anti-Indemnity Act (Insurance Code Chapter 151) voids many clauses requiring a party to cover the other's own negligence, with exceptions such as certain employee injury claims. Ask an attorney how these rules apply to your contracts.
What to Watch For
- Read who is protecting whom, and whether the clause covers the other party's own negligence.
- Pair every hold harmless clause with an insurance requirement and a certificate showing proof.
- Ask your agent whether your liability policy treats the clause as an insured contract.
- Have an attorney review important leases and construction contracts.
Common Questions
Is a hold harmless agreement the same as indemnity?
They are closely related and often appear together. A hold harmless clause says one party will not hold the other responsible, while indemnity is the promise to pay for losses; many contracts use both terms in the same sentence.
Does my insurance cover a hold harmless promise I signed?
Many liability policies cover certain contractual promises if the contract qualifies as an insured contract under the policy. Coverage depends on your policy's wording and the clause, so ask before you sign.
Sources
Last updated October 14, 2026 · Primesure editorial team · How We Write