Professional Indemnity FAQ

Hold Harmless Agreements and your Professional Indemnity

What is a "Hold Harmless" agreement and could this affect my professional indemnity insurance?

We often come across indemnity clauses in contracts which require one contracting party to “hold harmless” the other contracting party.

There are also judicial statements to the effect that an indemnity is a contract by one party to keep the other harmless against loss. So, is there a difference between an indemnity clause and a hold harmless clause? More particularly, what are their insurance implications from a company’s financial liability standpoint?

Essentially, a “hold harmless” clause gives the recipient of that clause (“the recipient”) the benefit of being “held harmless” - or “not be legally bothered” - by the other contracting party or any other party claiming against the recipient. A hold harmless clause is a risk transfer mechanism. In fact, the expression “hold harmless” is derived from the Latin word indemnis which means “not harmed”. The “hold harmless” obligation requires the grantor of that benefit to hold harmless the recipient from risks of potential loss as well as actual loss.

An example of a hold harmless clause is: “The contractor holds the principal harmless from any action, claims, liability or loss in respect of the performance of the services.” Under this hold harmless clause, the contractor is not only prevented from bringing any claim against the principal (even if the principal has contributed to the loss or liability in the first place),

This can have implications for Professional Indemnity Insurance, particularly if the insurers wish to subrogate against a party for a recovery after paying out a large claim for another party it turns out is actually liable. If this other party has a "hold harmless" agreement then insurers cannot do so. Unless disclosed and agreed to, Insurers may decline the original claim. Be careful with any "hold harmless agreement.

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Robert Cooper - one of 100 faces of small business

This week it was announced as part of Small Business Week,  that Robert has been named one of the 100 faces of small business for a State Government promotion on the great value that small businesses play in the State of Queensland.

You can see Robert's entry here:

It is the third accolade for CPR Insurance Services in a month and after seven and a half years in business is a real pep up for the company.

For Robert, it is the culmination of many years experience, becoming well qualified, experiencing the highs and lows of a career and always wanting to contribute to his community. Sometimes, these things just come together and you receive recognition for your efforts.

Robert says that there is no doubt that starting your own business is a huge challenge, but with the right research and planning, the right people around you and a good set of values that you apply to the vision of the company, you have a very good chance of making it all succeed.

Robert says he is lucky. He has a strong supportive Wife, Mandy, who is also part of the business, along with efficient and hard working staff such as Julia McLauchlan and Aidan Harmer who are building up their own skills in a learning environment. 

However, the most important and most supportive people for CPR Insurance Services are our clients who have stuck by us and supported us over the past seven years. Our focus remains on providing the best possible service we can and always acting in their best interests. To all our clients, we say thank you!

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CPR Insurance wins Brokerage of the year

CPR Insurance Services picked up the award for the Best Brokerage (1-5 staff) in Australia, last Friday Night (4th May 2018) at the Insurance Business Magazine Awards held at the Westin in Sydney.

Judging came from various parts of the industry. It is a great honour to be recognised for our hard work and particular Business values we follow. A full list of winners is listed here.

Success comes from having great staff, and we thank Aidan Harmer and Julia McLauchlan as important support staff for helping us win such an award.

CPR Insurance has been in operation for more than 7 years now and is only successful because of the wonderful support from our staff, insurers and most importantly, our fantastic clients who put their faith and trust into our company to be their Risk Advisers and Brokers. 

Thank you to all.

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