Hold Harmless Agreements in Personal Injury Cases

Below is a sample hold harmless agreement our lawyers sometimes uses with insurance companies in personal injury cases.

Sample Hold Harmless Agreement

ANA MAJANO- Plaintiff
MILES DIXON- Defendant,

CASE NO. 05-C-05-095553

Practice Tip: Insurance companies often want language protecting them from lien holders claiming the insurance company should have protected their lien. In some states, they are entitled to a hold harmless agreement. Either way, in most cases lawyers should make sure that the medical liens are being properly resolved. Here is some sample language you can use (because, incredibly, the insurance companies never seem to have anything like this handy).

It is expressly understood and agreed, that in consideration of all bills paid to _______________ which sum includes any and all MEDICARE/MEDICAID/TRICARE/Health Insurance lien(s) which have been, or which may be, presented for benefits paid to _________________________ as a result of physical, emotional or other injuries sustained in the automobile accident dated _____________________ which in connection with Claim Number ________________, the undersigned agree(s) to resolve the full amount of any and all liens, by accord and satisfaction or otherwise, and further agree(s) to save and forever hold harmless _____________________ Insurance Company from any and all liability therefrom.

_______________________________ ______________________________
(Client) (Date)

_______________________________ ______________________________
(Attorney) (Date)

Exculpatory Clauses

Hold harmless agreements in a different but related concept is an agreement to exonerate one party to the agreement. So the agreement says that even a party makes a negligent mistake or omission, a lawsuit cannot be brought.

Is this permissible in Maryland? Generally, it is. Maryland courts will uphold exculpatory clauses when the language of the agreement clearly and specifically indicates the intent to release the defendant from liability for personal injuries resulting from the defendant’s negligence. See Seigneur v. National Fitness Institute, Inc., 132 Md.App. 271, 752 A.2d 631 (2000) (upholding an exculpatory agreement between a health club and its potential member); Winterstein v. Wilcom, 16 Md. App. 130, 293 A.2d 821 (1972) (approving an exculpatory agreement between a drag racing track operator and a drag racing contestant).

The Maryland Court of Appeals doubled down — wrongly we believe — on this law in 2013, validating an exculpatory agreement signed by a parent on behalf of his five-year-old who suffered a brain injury. See BJ’s Wholesale Club, Inc. v. Rosen, 435 Md. 714, 80 A.3d 345 (2013).

Outside of the personal injury context, a hold-harmless agreement in title insurance is when a title company agrees to indemnify another title insurance company that is preparing to insure a transaction that the indemnifying title company has previously insured over without taking an exception to its title insurance policy for matters remaining of record. The most notable example would be an already paid but unreleased mortgage.

What Is a Hold Harmless Agreement?

A hold harmless agreement is defined as a contractual arrangement, usually in a settlement release where one party assumes the liability inherent in a situation, which relieves the other party of any responsibility. So “hold harmless” or “save harmless” means to fully compensate the indemnitee for all loss and expense.

When Are Hold Harmless Agreements Used in Personal Injury Cases?

Insurance companies for a defendant in a personal injury case will sometimes ask for some type of hold harmless agreement (or letter) to give them formal assurance that the plaintiff and their attorneys will resolve any medical liens and that the insurance company will not be responsible for liens that are not resolved.

What Is the Difference Between a Hold Harmless Agreement and a General Release?

A general release is the type of agreement that a plaintiff usually signs when they reach a settlement in a personal injury claim. It broadly releases the defendant/insurance company from any and all future claims and liability arising out of the accident.

A hold harmless agreement is much more limited in scope. It is like a limited release that absolves liability for a very specific responsibility that is assumed by the other party.

What Is the Difference Between Indemnify and Hold Harmless

In most states, “hold harmless and “indemnify” mean the same thing.  There are some courts, like California, that have found that “hold harmless” requires actual losses and potential liabilities but “indemnify” provides protection only against incurred losses.

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