What is the difference between an indemnification agreement and a hold harmless agreement in construction contracts?

In Maryland, an indemnification agreement and a hold harmless agreement are two different types of agreements that are commonly included in construction contracts. An indemnification agreement is an agreement between two parties where one party agrees to protect the other party in the event of a loss or damage due to its negligence or fault. In other words, the indemnifying party is agreeing to assume financial responsibility for any losses the indemnified party incurs. A hold harmless agreement is a type of agreement in a contract where one party agrees to not hold another party responsible for any losses or damages related to the contract. The hold harmless party is not agreeing to accept financial responsibility for any losses but is instead agreeing to not sue or prosecute the other party for any negligence or fault. In general, an indemnification agreement is more comprehensive than a hold harmless agreement as it holds the indemnifying party responsible for any losses or damages related to the contract. On the other hand, a hold harmless agreement is more limited in scope as it only holds one party from being held liable for any losses or damages. Thus, if both agreements are included in a construction contract, the indemnification agreement would have precedence over the hold harmless agreement.

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What is the difference between an indemnification agreement and a hold harmless agreement in construction contracts?

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