“What Did I Agree To? Recognizing Potentially Problematic Language in Indemnity Provisions"

Brian Richardson authored an article published by Construction Executive on Oct. 16, 2018, discussing indemnity provisions in construction contracts and their role in deciding who is responsible for a contractor’s negligence when subcontractors are involved.

Richardson explains when an employee or crew member gets hurt on the job, the indemnity agreement comes into play and could provide the contractor or other potentially liable party with the tools needed to determine who is liable. Standard industry contract language, such as the American Institute of Architects (AIA) forms or ConsensusDocs, provides some clarity, noting “the Subcontractor shall indemnify and hold harmless . . . only to the extend [the claims, damages, losses, and expenses are] caused by the negligent acts or omissions of the Subcontractor.” This means the subcontractor does not have to indemnify a contractor for claims arising due to the contractor’s negligence.

However, differences in enforcement from state to state further complicate things. For example, Alabama is one state that requires a subcontractor to indemnify a contractor for damages as a result of negligence only if the terms are “clear and unequivocal,” whereas Georgia will not enforce such agreements because they are “against public policy, void and unenforceable,” says Richardson.

There are a number of other considerations to note when evaluating an indemnity clause, and at the beginning of any new project, indemnification language should always be closely scrutinized to completely understand contractual obligations and potential exposure in the event of a claim for property damage or personal injury on the jobsite.

For the full article, click here.