This clause says that one party will not be responsible for injuries or problems caused to the other party's employees. For example, a contractor might agree they won't pay damages if one of your workers gets hurt on their job site, even if the contractor was careless. This matters because employment injuries can be very expensive, and normally you'd expect someone whose negligence caused the injury to pay for it. However, under US law (and similar principles in the UK), parties can agree to limit liability in advance, though courts will not enforce exclusions that violate public policy or apply to gross negligence. This clause is medium-risk because it removes your ability to recover from the other party, but your own workers' compensation insurance usually covers employee injuries anyway.
Check whether your workers' compensation insurance will still cover your employees even with this clause in place—in most cases it will, so your risk is lower. Negotiate to exclude this waiver for cases of gross negligence, recklessness, or intentional misconduct, since courts may not enforce a waiver that lets someone escape responsibility for serious wrongdoing. If you're the one being asked to agree to this clause, make sure the other party carries adequate liability insurance to protect you indirectly.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause says that one party will not be responsible for injuries or problems caused to the other party's employees.
Why should I care about this clause?
For example, a contractor might agree they won't pay damages if one of your workers gets hurt on their job site, even if the contractor was careless.
What are my options?
This matters because employment injuries can be very expensive, and normally you'd expect someone whose negligence caused the injury to pay for it.
How does this affect small businesses?
However, under US law (and similar principles in the UK), parties can agree to limit liability in advance, though courts will not enforce exclusions that violate public policy or apply to gross negligence.