Hold Harmless

See Also:
Blue Sky Laws
Tips on How to Manage your Lawyer
Theory of Constraints
Trade Credit
Compliance  Audit

Hold Harmless

Hold harmless, defined as a clause which defines both parties as not responsible for any loss, damage, and other issue from a contract, is common in the business world. A hold harmless indemnity agreement is used when both parties want to limit their liability from a deal which has negative implications for either or both parties.

Hold Harmless Explanation

Hold harmless, explained also as an agreement which limits the risk of doing business, protects a company from liability. Often times companies engage in actions, especially deals between one another, which inherently carry some risk. In such situations one or both businesses may want to include a hold harmless a clause in their contract. This way, the business owners can rest as they are not liable for any damages incurred.
Additionally, a company may enact a hold harmless waiver, to prevent risk, when they have greater bargaining power than another company which they are doing business with. In this situation, though it may not be in the best interest of both parties, the smaller business may want to sign the agreement. With this action they accept the disadvantaged position and continue because the value of the deal is greater than potential loss.
A form of hold harmless letter is present in the personal world too. Often in athletic pursuits, this type of agreement protects the business owner from the damages of injury to a person engaging in the activity. It is of special value to sole proprietors.

Hold Harmless Example

Margaret is a lawyer who works with commercial litigation. Her skills and hard work show in each of the cases she wins. Whether she is met with success or temporary failure there is no question that Margaret has done her best to protect her client.
Recently, Margaret is asked to protect a sole proprietor who owns a Karate class. This man, known to his students as “Sensei Dave”, has been holding his class for several years. Finally, after decades of successful teaching, a student has become hurt in his class. Though this is a natural part of this type of activity, the mother of the student is now suing Sensei Dave.
Margaret finds, to her delight, that Sensei Dave had the student sign a hold harmless form. Though this is not a complete protection, they have been overturned in cases of gross negligence on the part of the business owner. Therefore, Sensei Dave will have a better case in the event that it goes to court.
Margaret continues her preparations with a smile. She knows, thanks to his foresight, that Sensei Dave has a better standing in his unfortunate situation. Margaret will once again do her best to protect her client just as he has done himself.
hold harmless


The Struggles of Private Company Accounting

Hiring the right accountant  When I meet a business owner operating at a successful $10 million in revenue, they often mention, “My CPA”… I immediately know that CEO/Entrepreneur is referring to their Tax CPA.  That is because one thing that all Entrepreneurs have in common is that they must file a tax return.  So, from

Read More »


Friend of the firm, Birgit Kamps, recently had Strategic CFO President, Dan Corredor, as a guest on her podcast, CEO Blindspots. CEO BLINDSPOTS HOST: Birgit Kamps. She was speaking five languages by the age of 10, and lived in five countries with her Dutch parents prior to becoming an American citizen. Birgit’s professional experience includes starting

Read More »

SHRM calls ICHRA the 401K for Group Health Benefits

Fed-up with group health insurance? ICHRA is the new way to offer great health benefits and avoid ACA penalties, SHRM calls it the 401K for group health benefits.  In 2020 the Department of Labor, HHS and IRS changed the rules for employer health benefits. They changed the Affordable Care Act mandates and penalties for every

Read More »


Financial Leadership Workshop

MARCH 28TH-31ST 2022



Strategic CFO™ Financial Leadership Workshop
The Art of the CFO®


September 12-15th 2022