Hold harmless and indemnification clauses in broker and facility contracts

Two promises that share a name

NEMT contracts use “hold harmless” for two different promises, and you sign both.

The first is indemnity. You agree to defend the broker, county, or facility and pay its losses when a claim grows out of your work. Sonoma County’s contract guide puts the effect plainly: indemnity does not erase the other party’s liability, it shifts the defense and damages to you, and if you cannot pay, the costs land back on them. That is why the same contracts also ask for additional insured status, and the wider risk picture is in NEMT liability.

The second protects the rider’s wallet. Under 42 CFR 438.106, Medicaid managed care plans must keep members out of it whenever a covered service goes unpaid, whether the state misses its payment to the plan or the plan misses its payment to the provider, and 42 CFR 438.9 extends that rule to prepaid plans that provide only rides. MTM’s Pennsylvania agreement passes it down: only MTM pays you, and a member may not be billed if MTM or its client defaults. A copay is allowed only where MTM or its client authorizes one.

Broad, intermediate, or limited

The indemnity clause comes in three common strengths, depending on whose negligence it covers:

• Limited. You cover claims that come from your own negligence only.
• Intermediate. You also cover claims where both sides were negligent.
• Broad. You cover claims even when the other party alone was at fault. Several states refuse to enforce this form.

Real NEMT clauses show the range. MART’s agreement ties your duty to claims arising from your breach or from the negligence or misconduct of your company or staff. A later section of the same contract goes much further: to the fullest extent permitted by law, you cover claims alleged to arise from your performance, including consequential and punitive damages, and the promise survives after the contract ends. MTM’s Pennsylvania agreement carves out only losses caused directly by MTM’s willful misconduct. The sample contract in Hamilton County’s December 2025 solicitation covered anything arising out of or incident to the contract work in any way, administrative and regulatory proceedings included.

What your insurance will and will not pay

Your general liability policy covers part of the promise through the insured contract exception. The standard ISO form excludes liability you assume by contract, then restores coverage for any business contract term under which you “assume the tort liability of another party to pay for ‘bodily injury’ or ‘property damage’ to a third person or organization,” as long as the injury comes after the contract was signed. Three gaps follow:

1. Money that is not injury or damage. MTM’s clause reaches noncompliance assessments, penalties, and liquidated damages charged because of your company. Those are not bodily injury or property damage.
2. Crashes. General liability excludes auto claims, so indemnity for a van accident rests on your business auto policy and its own insured contract wording, covered in NEMT insurance exclusions.
3. Promises bigger than your limits. MART states that the insurance it requires puts no ceiling on your duty to indemnify, and Arizona’s subcontract terms say the same. The clause can outrun your policy.

Contractual liability coverage also never reaches past the clause. Sonoma County’s example: if a contract caps indemnity at $100,000, that coverage pays no more than $100,000, even under a $1,000,000 policy.

Can a state law void the clause?

Sometimes. Anti-indemnity statutes limit how much liability one party can shift to another, and some also limit the additional insured coverage that can be demanded for liability the law will not let you transfer. They are commonly aimed at construction, energy, and transportation contracts, so check whether your state’s law reaches a passenger service contract before you rely on it. Clauses that say “to the fullest extent permitted by law” (MART’s, MTM’s, and Hamilton County’s all do) ask for as much as your state’s law will allow. A contract lawyer in your state can tell you which form your clause really is.

When you can negotiate, ask for mutual indemnity: each side covers claims that come from its own negligence. The facility transportation agreement template uses balanced terms, and the related waiver of subrogation usually sits in the same section.

Records that settle who was at fault

An indemnity fight turns on what happened on the trip. For each trip, HealthRide stores the timestamps, the GPS-recorded miles, the signatures captured on screen, and recorded wait times on no-shows. Brokers and insurers asking for proof can be sent the trip log as a PDF or CSV file.