Hold Harmless Agreement: Free Template and When to Use It

If you hire a contractor, rent out a space, run an event, or let anyone use your equipment, you are exposed to claims that were never really your fault. A hold harmless agreement is one of the simplest tools for shifting that risk to the party who actually created it. This guide explains what the agreement does, the three forms it comes in, when to use one, and includes a free template you can adapt.

What Is a Hold Harmless Agreement?

A hold harmless agreement is a contract provision in which one party agrees not to hold the other party legally responsible for certain losses, damages, injuries, or claims that arise out of their dealings. In plain terms: one side promises to absorb the risk so the other side does not have to.

It is closely tied to indemnification, and the two terms are often used together. There is a subtle distinction. To indemnify means to compensate the other party for losses they suffer. To hold harmless means to shield them from being sued or held liable in the first place. Many contracts pair the phrases - "indemnify and hold harmless" - to cover both angles, and courts generally read them as a combined liability transfer.

According to Cornell Law School's Legal Information Institute, a hold harmless clause is a contractual arrangement whereby one party assumes the liability inherent in a situation, relieving the other party of responsibility. It is a standard, widely enforced risk-management device - but, as you will see, not an unlimited one.

If you are setting up your company's paperwork more broadly, it fits alongside other core documents like your business plan and the right small business insurance coverage.

The Three Types of Hold Harmless Agreements

Not all hold harmless clauses transfer the same amount of risk. The International Risk Management Institute identifies three standard forms, from broadest to narrowest.

Broad Form

The indemnifying party assumes nearly all liability - including claims arising from the other party's own negligence. This offers the strongest protection to the party being held harmless, which is exactly why many states restrict or prohibit it. Because it can force a party to pay for damage they did not cause, courts scrutinize broad form clauses heavily.

Intermediate Form

The indemnifying party accepts responsibility for losses caused by its own actions and by shared (joint) negligence, but not for the other party's sole negligence. This is the most common form in the construction industry because it splits risk more fairly.

Limited Form

The narrowest option. Each party is only responsible for losses arising from its own negligence. Party A holds Party B harmless solely for suits stemming from Party A's own conduct. This is the easiest form to enforce because it aligns liability with fault.

If you are unsure which to use, limited or intermediate forms are safer starting points - broad form clauses are the most likely to be struck down.

When to Use a Hold Harmless Agreement

Hold harmless provisions show up anywhere one party could be blamed for something outside its control. Common scenarios include:

Service and contractor work. A general contractor requires subcontractors to hold it harmless for injuries or defects tied to the sub's work.
Leases and rentals. A landlord asks a tenant to accept responsibility for injuries or damage occurring within the leased space.
Events and venues. An organizer requires participants to waive claims for ordinary risks of the activity.
Equipment and property use. You lend a tool, vehicle, or facility and want protection if the borrower causes harm.
B2B service agreements. Vendors and clients allocate who covers third-party claims. If you sell to other companies, this is standard - see our overview of what B2B means.

Using one is especially worth it when the potential loss is large relative to the value of the deal. It is not a substitute for insurance; it works best layered on top of a proper policy such as general liability insurance or, for licensed and bonded work, a surety bond.

What Makes a Hold Harmless Clause Enforceable (and What Doesn't)

A hold harmless agreement is only as good as its enforceability, and this is where businesses get tripped up. These clauses are creatures of state law - the same wording can be fully valid in one state and void as against public policy in another. Reporting compiled from industry sources notes that a large majority of states have anti-indemnification statutes limiting one or more forms of hold harmless clause, particularly in construction and residential leases.

A few rules hold true almost everywhere:

Clear, specific language wins. Courts require unambiguous wording that identifies the parties, the risks, and the incidents covered. Vague catch-all clauses invite challenge.
You cannot waive liability for recklessness or intentional wrongdoing. No state lets you contract away responsibility for gross negligence, fraud, or willful harm.
Consumer contexts get extra scrutiny. Residential leases and consumer agreements are where courts most often refuse to enforce these clauses.
Cross-border deals need a local check. A clause that is airtight in Texas may be unenforceable in California.

Because of that state-by-state variation, treat the template below as a starting point - not a substitute for a lawyer's review in your jurisdiction.

Free Hold Harmless Agreement Template

Copy, adapt, and have it reviewed locally before you rely on it.

HOLD HARMLESS AGREEMENT

This Hold Harmless Agreement ("Agreement") is entered into on
[DATE] by and between:

Indemnifying Party: [NAME/COMPANY], located at [ADDRESS]
Indemnified Party:  [NAME/COMPANY], located at [ADDRESS]

1. PURPOSE
This Agreement relates to [DESCRIBE THE ACTIVITY, SERVICE,
PROPERTY, OR EVENT].

2. HOLD HARMLESS
The Indemnifying Party agrees to indemnify, defend, and hold
harmless the Indemnified Party from and against any and all
claims, damages, losses, liabilities, and expenses (including
reasonable attorneys' fees) arising out of or related to
[DESCRIBE COVERED RISKS], except to the extent caused by the
Indemnified Party's own negligence or willful misconduct.

3. TYPE OF PROTECTION
This is a [LIMITED / INTERMEDIATE / BROAD] form hold harmless
provision as described above.

4. GOVERNING LAW
This Agreement is governed by the laws of the State of [STATE].

5. ENTIRE AGREEMENT
This document constitutes the entire agreement between the
parties on this subject.

Signed:

_____________________        _____________________
Indemnifying Party           Indemnified Party
Date: __________             Date: __________

Adjust clause 2 to match the type of protection you actually need. The carve-out for the other party's own negligence keeps you in limited/intermediate territory, which is the most enforceable.

For guidance on presenting and formatting agreements professionally, our letter format guide covers the layout conventions clients expect.

Conclusion

A hold harmless agreement is a low-cost, high-leverage way to keep other people's mistakes from becoming your legal bills. Know which of the three forms you are using, keep the language clear and specific, and remember that enforceability lives and dies by your state's laws. Pair it with real insurance rather than treating it as a replacement.

Ready to tighten up your contracts? Start with the template above, match it to the right form for your situation, and run it past a local attorney before you sign.