502: Basic Contract Content
Last Revised: September 2009
Hold Harmless Clauses: Many contracts carry a hold harmless clause. Under the state's self-insurance program, we are only protected against negligent acts of our employees if (1) they are exercising "due care", (2) they are exercising a discretionary function or (3) they are acting under a statute which has not been declared invalid. The State's self-insurance program, to which the NSHE belongs, protects only against acts or omissions of NSHE employees that occur within the scope of public duty or employment and that are performed or omitted in good faith. Therefore, we cannot agree to hold the other party harmless from any and all claims or losses, whether or not caused by any fault of one of our employees. If the other party insists on a hold harmless clause, we can only agree to the language recommended by general counsel which is as follows:
"To the extent limited in accordance with NRS 41.0305 to NRS 41.039, the university (or college, contractor, lessee, or other appropriate term representing the Board of Regents) shall indemnify, defend and hold harmless ______________(name of other party) from and against any and all liabilities, claims, losses, lawsuits, judgments, and/or expenses, including attorney fees, arising either directly or indirectly from any act or failure to act by (Institution) or any of its officers or employees, which may occur during or which may arise out of the performance of this Agreement. (Institution) will assert the defense of sovereign immunity as appropriate in all cases, including malpractice and indemnity actions. (Institution's) indemnify obligation for actions sounding tort is limited in accordance with the provisions of NRS 41.035 to $75,000 per cause of action."
The Chancellor will not approve contracts with hold harmless clauses that do not comply with general counsel's language, and persons who have been delegated signature authority are not authorized to sign such contracts.
Insurance Clauses: Many contracts carry a clause that requires a specified amount of liability insurance coverage. However, the university is covered by the state's self-insurance program for all liability coverage and therefore cannot comply with the terms of these clauses. If the other party will not agree to remove these clauses from a contract, the will often agree to a modification to the clause such as follows:
"The (Board of Regents, university, college or other appropriate name) is self-insured in accordance with limitations of NRS 41.0305 to NRS 41.039."
If no agreement can be reached on deleting or modifying an insurance requirement, special coverage may be purchased if the contract is of sufficient benefit to the university to warrant the cost of the special coverage AND a carrier can be located who will provide the coverage.