A company may add a holding contract to a contract if the selected service involves risks that the company does not wish to be held legally or financially responsible for. Compensation is a contractual obligation of one party (compensation) to compensate for the damage suffered by the other party (the holder of damages) by the actions of the compensation holder or another party. The obligation to compensate is generally, but not always, with the contractual obligation to «keep compensated» or «keep unscathed» coextensis. On the other hand, a «guarantee» is an obligation of one party that assures the other party that the guarantor will keep the promise of the third party in the event of a default. Moreover, the explanation gives the somewhat misleading impression that insurers are absolving the criminals of their liability. In such a case, in exchange for payment to pay your loss, the insurer will generally have to be subject to an assignment of the right you have against Timmy for the damage caused. They will then sue Timmy and recover their expenses. To this extent, auto insurance is not just an example of compensation, as it can also be analyzed as an exchange contract (i.e. the insurer gives you money in exchange for a right – essentially a debt – probably the same value). This is different from the premiums paid by policyholders to insurers, in that in this case there is no necessary link between the level of payments from different parties (the differences between the two are, after all, how insurers try to make their profits). Of course, if Timmy does not have enough assets to fulfill the judgment against him, then the situation is a simple compensation, since the insurer has generated a non-refundable cost for the payment of the policy. The «stop-damage» clause may be unilateral or reciprocal.
By a unilateral clause, one party undertakes not to make the other party liable for the damages or injuries suffered. By a change clause, both parties agree to keep the others unscathed. The first situation described above is a unilateral non-detention clause. The contractor is the only one who requires to be considered harmless. The second example is a reciprocal clause. The owner also seeks damages from the contractor. For example, compensation clauses or agreements in construction contracts are an attempt to protect the contractor from lawsuits and losses due to negligence. A person may attempt to be compensated for his duty or activity in the course of his activity.