What is the difference between a "Hold Harmless Agreement" and an Insurance Policy?

Question

I need to know why a company ask for both.

Answer 1

A hold harmless agreement is something you will sign that states that you will not hold the company responsible for something.  For example, you will not hold the company responsible for damages done to your equipment on a job sight.  An insurance policy will insure your liability so that if you accidently burn the company's building down (you are welding & a spark flies by accident & catches the place on fire), you will be covered up to your liability limit.

They would want both because they are 2 different things.

Answer 2

A hold harmless agreement is something where one party agrees not to sue the other party.  In many situations, it won't hold up in court.

An insurance policy pays for any damages, in accordance to what type of policy it is, subject to policy terms and conditions.

It's very, very common for someone you have a business dealing with, to ask for a hold harmless agreement.  You, in turn, should be asking for the same.  That's called, a MUTUAL hold harmless agreement.  

However, business dealings could involve lawsuits from parties NOT party to the hold harmless agreement, or, a judge could rule it against public policy (nullify it), in which case, you need insurance to be in place.