Five Terms You Will Need to Know Prior to Signing Your Release of Claims Form

If you have been involved in an accident that was the result of the negligence of another driver, you will eventually have to settle with the other driver's insurance company. In order to receive a final settlement check, you will be presented with a liability waiver or release of all claims form. Once you sign this form and accept the check from the insurance company, you will not be able to make any additional claims based on your accident. Here are a few terms that you will want to know prior to signing it. 

Indemnity and Hold Harmless

When you have an accident you run the risk of having a lien placed on any future proceeds that you may receive. These may come as a result of someone else paying your bills that have been associated with the accident. The lien may come from any of the following:

  • Medicare
  • Medicaid
  • Your health insurance company or another 3rd party

If your auto insurance company has had to pay to fix your car, and you have had to pay them your deductible, they too have a right to go after the insurance company of the person that hit you in order to recoup the monies both of you have paid. This is referred to as subrogation

When you indemnify and hold harmless, you are acknowledging that all of these have been settled and that there will be no additional claims or charges being made against the company who is having to pay the bills.

Release of Claims

When you sign a release of claims, you will be releasing the person that hit you, and their insurance company, from any further responsibility or liability on your behalf. This means that once you sign you will not be able to bring any additional claims against any of the parties listed in the release, which usually includes the driver of the vehicle, as well as their insurance company.

Attorney's Fees for Enforcement of the Release

It may be included in your release that you will be liable for any attorney fees and court costs that may have to be paid if any additional legal action is required in order to enforce the release. 

Tax Implications

When you sign the release you are responsible for all taxes that may be required as a result of you receiving the settlement. These may include state, federal, and local taxes. While some settlements may be able to be received tax free, tax laws vary from state to state. This is something that you may want to ask your tax accountant or auto accident attorney about. 


If you agree and sign a non-disclosure statement as a part of your release, you will not be allowed discuss anything related to your case. This includes:

  • Your settlement amount
  • Terms of the negotiation
  • Existence of the release and more

If you fail to keep this information confidential, you may find yourself subject to a lawsuit by the company you have signed the release with. This time they will be coming after you to pay them money instead of the other way around. 

You need to be extremely careful before you agree to sign a release of any lawsuit you are engaged in. Once you put your signature on the paper, there is no way to come back and change your mind. You need to ensure that any and all documentation that is presented to you by the insurance company is reviewed and approved by your car accident lawyers. They will ensure that any agreement is in your best interest and only contains wording that will work in your favor.  For more information, contact a professional such as Carl L. Britt, Jr.