Hold Harmless Agreement

Hold harmless agreements are embedded in nearly every tree service contract, whether you are the one signing it or presenting it. The clause allocates risk between the parties by specifying who will bear responsibility for losses. In the tree service industry, these agreements typically require the tree company to hold the property owner harmless for any claims arising from the tree work.

There are three types of hold harmless agreements, and the differences are significant. A "broad form" hold harmless requires you to assume liability even for the other party's own negligence — you are responsible for everything. An "intermediate form" requires you to assume liability for your own negligence and shared negligence but not the other party's sole negligence. A "limited form" only requires you to assume liability for your own negligence. Some states have anti-indemnity statutes that prohibit or limit broad form hold harmless agreements in construction contracts. Know your state's rules.

For tree service companies, the practical impact is this: when you sign a hold harmless agreement, you are accepting financial responsibility for certain claims. Your general liability policy's contractual liability coverage is what responds to these obligations — but only to the extent the agreement does not exceed what the policy covers. If you sign a broad form hold harmless in a state that allows it, and a claim arises from the client's sole negligence, your GL carrier may deny the claim because it exceeds standard contractual liability coverage.

Always have your agent or attorney review hold harmless language before signing. And make sure your own subcontractor agreements include hold harmless clauses flowing risk down to your subs.