“Indemnify”, “Save and Hold Harmless”, and “Defend”

One commonly finds the following language in the indemnity provisions of a contract:

Acme shall indemnify, defend, and hold harmless Widgetco from…

But what do each of these terms mean? A very well respected authority on contract drafting Ken Adams has written numerous times on this topic and argues that all three terms mean the same thing and, in fact, one would replace the three terms with simply:

Acme agrees to indemnify Widgetco against both losses and liabiliites.

But no matter how I read the reformulated indemnity, it does not seem to imply that Widgetco never has to even dip his hand in his own pocket, a view that the court in Stewart Title Guarantee Co. holds when interpreting the term “save and hold harmless”.

In my view, the words “indemnify”, “save and hold harmless”, and “defend” are terms of art that mean the following (case law below):

  1. “Indemnify”. Means to make a person whole after the fact.
  2. “Save and Hold Harmless”.  Broader than “indemnify” and means the person saved and held harmless should never have to put his hand in his own pocket in respect of a claim.
  3. “Defend”. Arises at the earliest stages of litigation and exists regardless of whether the indemnitee is ultimately found liable.


The Canadian case, Stewart Title Guarantee Co v. Zeppieri in para. 17 states:

This language imposes two obligations on Stewart Title with respect to a member of the LSUC — to “indemnify” that member and to “save harmless” that member from claims arising under a title insurance policy. The contractual obligation to save harmless, in my view, is broader than that of indemnification. I accept the respondents’ submission that the obligation to “save harmless” means that a LSUC member should never have to put his hand in his pocket in respect of a claim covered by the terms of the 2005 Indemnity Agreement. Accordingly, the 2005 Indemnity Agreement requires Stewart Title to pay for the member’s ongoing costs of defending a claim that falls within the coverage of agreement. This interpretation not only is consistent with the plain meaning of the phrase “indemnify and save harmless”, it also is consistent with the case law, the business sense underpinning the 2005 Indemnity Agreement and the reasonable expectations of the parties

The American Case, Branch Banking & Trust Co v. Syntellect, Inc. states:

As a preliminary matter, both parties blur the distinction between the duty to defend and the duty to indemnify. In one count for breach of contract, the compliant alleges that Syntellect breached both its duty to defend and its duty to indemnify. Similarly, Syntellect’s motion to dismiss operates on the assumption that these two duties are one. However, the duty to defend and the duty to indemnify were two separated duties created by the contract…

The American Case, INA Ins. Co. v. Valley FOrge Ins. Co states:

The duty to defend, however, is not the same as the duty to indemnify. The duty to defend arises at the earliest stages of litigation and generally exists regardless of whether the insured is ultimately found liable. The duty to indemnify depends on whether the indemnitee engaged in actual, active wrongdoing. See Koch v. City of Seattle. The accrual of the obligation to provide a defense does not control the accrual of the obligation to indemnify.

Posted on by Sam Posted in Law

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