You should obtain this agreement regardless of whether you are purchasing the business via an asset purchase or a stock purchase.

This will protect you against unknown or undisclosed liabilities that resulted from the previous business owner's actions while running the business.

If your business seller refuses to sign a Hold Harmless agreement, it's probably time to walk away and find another deal.

The typical language for a Hold Harmless agreement is outlined below:

Business Seller agrees to indemnify and hold harmless Business Buyer from and against any liabilities, obligations or claims against the business of any nature whatsoever, whether past, current or future, whether accrued, contingent, known or unknown, that are not disclosed on the Schedule attached hereto.

Seller furthermore shall indemnify, defend and hold Business Buyer harmless against all losses, damages, costs and expenses (including legal fees) incurred by Business Buyer in defending against such matters.

Needless to say, this language is provided for educational purposes only. You should consult with a competent corporate attorney to write the contract for buying the business you are pursuing.