Effective contractual risk transfer requires specific wording in the contract between the transferor and the transferee. Commonly known as the "indemnity (or 'indemnification') agreement," many contracts contain some form of indemnification and hold harmless wording such as the following (only an example, not intended as legal advice):

• "For and in exchange for fair and equitable consideration, [transferee] (name of the lower tier party) agrees to indemnify, hold harmless and waive any right of subrogation against [transferor] (name of the upper tier party) from any and all liability or cost arising from bodily injury or property damage caused in whole or in part by the (transferee)."

Indemnity agreements are the heart of contractual risk transfer. "Indemnification" is the contractual obligation of one party (the transferee) to return another party (the transferor) to essentially the same financial condition enjoyed before the loss (without improvement or betterment). Hold harmless wording shields the transferor from the effects of the legal liability that can be assigned to them as a result of the actions contractually transferred (based, to some extent, on the level of transfer jurisdictionally allowed).

Indemnification and hold harmless wording is not necessarily affected by, nor do they affect, the transferee's insurance coverage; it is purely a contractual issue requiring one party to stand in place of another - regardless of the presence of insurance to finance the costs.

So, how does your client's insurance policy respond to promised indemnification? Does the insurance policy finance everything your client's promise?

These and other questions are answered in this informative webinar.