Contractual liability insurance can be defined as coverage for the named insured's liability that is created when it assumes, in an oral or written contract, the financial consequences of another's negligent acts or omissions that results in bodily injury or property damage to a third party. To better understand contractual liability coverage, as provided by a CGL policy, some knowledge of the mechanics is required. First of all, apart from the insurer and the claimant, there are two important parties: the indemnitor and the indemnitee. The indemnitor is the one who agrees to hold harmless the other party who is referred to as the indemnitee. (One way to distinguish between these two parties is to refer to the letters "o" and "r" and remember that the indemnitor has to agree to take the assumption "or" not be hired for the job by the indemnitee.)