Hold Harmlesss Agreement
Is the provision in a Hold Harmless Agreement that the Indemnitee hold harmless the Indemnitor for the sole negligence of the Indemnotor enforceable or deemed against public policy? As a General Liability underwriter I find it increasingly required that the Indemnitee furnish a Certificate of Insurance to the Indemnitor that the specific HH agreemnt is covered. This is particulary true of railraods and oil drilling and service companies with economic leverage over small contractors. I advise them not to enter ito these agreemnets but too often it is afer the fact.
Re: Hold Harmlesss Agreement
The only specific prohibition on an indemnity clause which indemnifies the indemnitee for the indemnitee’s own negligence is in the building and construction contract area under Chapter 337. Here is a link (you may need to copy & paste into your own browser): http://www.revisor.leg.state.mn.us/stats/337/
In that statute, as you will see, such clauses are void as against public policy unless the indemnitor specifically agrees to take out an insurance policy to cover the liability obligations of the indemnitee and the indemnitor.
So, in the scenario you describe — depending on the specific language in the indemnity clause (there has been a lot of litigation on this issue in MN) — the indemnity agreement coupled with the indemnitor’s undertaking to procure insurance is PROBABLY valid.
Normally (and you probably know better than I do), the indemnitor’s obligation to procure insurance would probably be satisfied by obtaining an OCP policy which, I’ve been told, costs only pennies per $1,000 in coverage, at least for most contractors. The OCP does not, of course cover completed ops but (and I am on thin ice here) presumably the contractor could name the owner as an addtitional insured on its completed ops coverage.
As a practical matter I’ve found, in representing design professionals and contractors, that the owners are very unwilling to modify or change hold harmless clauses because their project managers are terrified of involving the dreaded legal department, for fear it will hold the contract up forever. They also always use the line, “everybody else signs this so why should you think you’re so special?”
Hope that helps answer your question. I do a lot of construction law work, so if there is anything further, feel free to give me a call.
Standard disclaimer: The comments above are based on limited facts and should not be considered legal advice. We do not have an attorney-client relationship.
Vincent W. King
Vincent W. King, PA
310 South Fourth Avenue, Suite 900
Minneapolis, MN 55415