Also known as: saving harmless · saved harmless · saves harmless · hold harmless · indemnify
Written by attorneys · grounded in primary & secondary sources — see below
An obligation by which one party must protect another from liability, loss, or expense arising from specified claims, debts, or proceedings. The obligation arises when the protected party faces demands connected to its role or status.
Sentinel Security faces a products liability suit. During initial disclosures, Sentinel must produce its liability policy because the insurer may be required to save harmless Sentinel by satisfying any judgment entered against it. The obligation to save harmless therefore becomes part of the discoverable record that shapes settlement strategy.
Stonehaven Properties purchases several rental houses. Ridge Properties issues a title policy that saves harmless Stonehaven against loss from any municipal liens or recording defects the title search failed to list. When liens surface after closing, the insurer must pay the costs of clearing title under the save-harmless promise.
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Samuel Soto, a director of Sapphire Holdings, is sued for alleged breach of fiduciary duty in approving a merger. The corporation elects to save harmless Soto by paying his defense costs and any resulting judgment because his conduct satisfied the statutory standard of conduct. The decision triggers the corporation's authority to indemnify under the governing statute.
Sofia Stern, a manager of Sierra Solutions, faces a third-party claim arising from her management decisions. The LLC must save harmless Stern for the claim and any resulting liability because the claim does not stem from a breach of her statutory duties. The obligation therefore shifts the entire financial burden to the company.
Spencer Silver, a partner in a consulting firm, incurs defense costs after a client sues over advice given in the ordinary course of business. The partnership must save harmless Silver for those expenses because the liability did not arise from any breach of partner duties. The obligation therefore protects Silver from personal loss.
Santiago Sanchez, a director of Stonehaven Properties, seeks indemnification after a judgment finding he acted in bad faith. The corporation may not save harmless Sanchez because the statutory prohibition bars indemnification when the director fails to meet the required standard of conduct. The limitation prevents corporate assets from shielding willful misconduct.
The duty arises when a partner incurs liability by reason of the partner's capacity and the liability does not stem from a breach of statutory partner duties. The obligation therefore shifts defense costs and judgments to the partnership unless misconduct disqualifies protection.
Title insurance saves harmless the insured only against defects and liens not listed as exceptions in the policy. A bulk-purchase endorsement may further limit coverage to defects that a reasonable individual-property search would have revealed.
A corporation may not save harmless a director when the director's conduct fails to meet the statutory standard of conduct or when a court has not ordered indemnification under the statutory exception. The prohibition prevents protection of bad-faith or unlawful acts.
An incoming partner is not personally liable for partnership obligations incurred before admission, including any duty to save harmless a third party under a pre-existing contract. Liability remains with the partnership and prior partners.
…jurisdiction pursuant to Minn. Stat. § 571.41, subd. 2 (1978), which allows garnishment of an insurer's obligation to defend and indemnify its insured. See post , at 322-323, n. 3, and accompanying text. The Minnesota Supreme Court has interpreted the statute as allowing suit only to the insurance policy's liability limit.…