Damages vs. Hold Harmless Agreements

By Randall C. Resch Many scenarios aren't ordinary load-and-go operations, and there's always potential for secondary damage. When it comes to working the beyond-the-norm scenarios we're commonly faced with, the need to obtain a signed Hold-Harmless Agreement is sometimes necessary before working on someone's car or beginning that difficult recovery. While I feel HHAs are a necessary evil, they often hold little to no value in court. One incident in the news reported, "When we contacted (names deleted), a spokesperson told us the company isn't responsible, but, then agreed to, 'cover 100-percent of the costs of the damage sustained to the car as a result of the towing,' calling it, 'a unique case.' " What does that tell you? Why would the insurance company pay if this resulting situation were cut and dry? The consumer's attorney in this claim told reporters, "It was the insurance company's decision on who to hire to come out and tow the vehicle. So they should be responsible." He thinks the motorist's insurance company should help her out because, "After all, they hired the tow company." If you require a motorist to sign a HHA, they typically cry to a judge that they were coerced into signing the document only to get their car off a rock. The owner knew the possibilities going into this and agreed. Why should the tower be responsible for a compromised vehicle? I believe vehicle owners have a right to choose or deny service. From the rock scenario, I believe the tower made sufficient up-front, verbal warnings regarding the hazards of recovery. Could their recovery methods have been conducted in a different manner? Perhaps, but that's only part of this argument. I don't pass judgment on the tower's techniques, as I wasn't there. While HHAs aren't overly effective, I've used them as a component of my honest and truthful testimony. Additionally, I've presented a signed HHA as secondary evidence to my testimony that I provided explicit warning to the vehicle's owner. I don't rely only on signed agreements, but also testify that I made my customer fully aware of all "what if's" long-before a hold-harmless was ever discussed. If, at some point, a judge asks your side of the story, be adamant regarding your honest and complete explanation as to what you advised your customer regarding potential damages. The HHA is one component of the vehicle owner's understanding and subsequent agreeing with you before work ever commences. To me, that's a reasonable and prudent way to conduct business without creating that "I got bullied into signing" syndrome. Author's Note: This opinion isn't intended to be legal representation. It's recommended you contact your company's counsel as it relates to your business operations and hold-harmless agreements before any situation arises.