What is the difference between a hold harmless agreement and a waiver of subrogation?

Question

Can you explain how these 2 items are different and how they are similar? Examples would be great.

Answer 1

These are two different types of agreements. About the only thing you can say they have in common is that they are agreements. A hold harmless agreement example would be if you were selling me your business and along with the sale of the business I was taking responsibility for paying some bills that you had incurred for the business. You did not want to be responsible for those bills after the sale. The sale agreement would include language whereby I would "hold you harmless" for the payment of those bills. If I failed to pay those bills, and the creditor came after you for payment and you ended up having to pay, you would have legal recourse through the court system to come after me for reimbursement of the money you had to pay out.

A waiver of subrogation is more often used in insurance contracts but may also be used in business agreements. Subrogation is the right you have, in essence, transferred to someone else to sue on your behalf. For example, if you are the victim of a car accident your insurance company, by the subrogation rights you gave them when you bought the policy, will pay for the damage to your car and then seek to be reimbursed by the person you hit you. This would be a right you would have if the insurance company did not have this subrogated right. A waiver of subrogation means that you would not be giving up a right to sue someone for the harm they caused you. In the insurance example, if you could find such a thing as a waiver from an insurance company, the insurance company would pay for the damage, you would have to sue the other party and then pay the money to the insurance company because they have already paid for the repairs. A very short answer to a complex question, hoped it helps somewhat.