Should I include a hold harmless clause in my contract?

When is a hold harmless clause important?

These clauses are especially helpful when your work could expose the other party to claims. For example, service providers often include them to cover risks tied to their work, while property owners may use them for risks tied to their space.

They are most valuable when there is a clear risk of third-party claims, injuries, or damages connected to one party's responsibilities.

When might a hold harmless clause be unnecessary or limited?

In lower-risk agreements, or where responsibilities are already clearly defined, a hold harmless clause may be less critical. Also, the clause only applies to the situations listed. If it is too broad or unclear, it may not be enforceable, and it does not eliminate all liability.

What to do next...

1. Evaluate the risks tied to your services or activities.
2. Decide which party should cover specific risks.
3. Use clear, specific language in the clause.
4. Make sure both sides understand and agree to it.

What to consider in your specific situation

While hold harmless clauses are common, whether you need one depends on your business and risk level.

• The type of services or activities involved.
• The likelihood of third-party claims or injuries.
• The exact wording and scope of the clause.
• Whether the clause is one-sided or mutual.
• Local laws that affect enforceability.
• The financial impact of potential claims.

Clear risk allocation can help prevent disputes and protect your business. Since every situation is different, consider more information through Rocket Copilot, a Legal Pro, or a legal document review to move forward with confidence.