In simple terms, Hold Harmless is a clause that is added to a legal contract by the party issuing the contract. It states that in the event of third-party financial loss, bodily injury, or damage to property during the contract, you will be liable and not them. It is a risk management strategy adopted by them to safeguard their business from financial setbacks and legal expenses if an accident leads to liability claims.
If you sign a contract with another company where you agree to a hold harmless agreement it means that you accept the responsibilities for specific risks involved during the contract period and your business is now liable for both losses and claims.