Is The Indemnification Provision In My Construction Contract Valid?
Posted January 08, 2024 in Uncategorized
INDEMNIFICATION IN CONSTRUCTION CONTRACTS.
When reviewing, negotiating, and drafting construction contracts in Colorado, practitioners have to consider whether the indemnification provision is legal. One hot topic that arose over the past few years was whether a party to a construction contract can contract away their own negligence – that is, whether a party can make another indemnify that party for that party’s own negligence.
The legislature has answered no. The Pro Rata Liability Act states the following:
13-21-111.5. CIVIL LIABILITY CASES – PRO RATA LIABILITY OF DEFENDANTS – RESPONDEAT SUPERIOR – SHIFTING FINANCIAL RESPONSIBILITY FOR NEGLIGENCE IN CONSTRUCTION AGREEMENTS – LEGISLATIVE DECLARATION.
(1) In an action brought as a result of a death or an injury to person or property, no defendant shall be liable for an amount greater than that represented by the degree or percentage of the negligence or fault attributable to such defendant that produced the claimed injury, death, damage, or loss . . .
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(6) (a) The general assembly hereby finds, determines, and declares that:
(I) It is in the best interests of this state and its citizens and consumers to ensure that every construction business in the state is financially responsible under the tort liability system for losses that a business has caused;(II) The provisions of this subsection (6) will promote competition and safety in the construction industry, thereby benefitting Colorado consumers;(III) Construction businesses in recent years have begun to use contract provisions to shift the financial responsibility for their negligence to others, thereby circumventing the intent of tort law;(IV) It is the intent of the general assembly that the duty of a business to be responsible for its own negligence be nondelegable;(V) Construction businesses must be able to obtain liability insurance in order to meet their responsibilities;(VI) The intent of this subsection (6) is to create an economic climate that will promote safety in construction, foster the availability and affordability of insurance, and ensure fairness among businesses;(VII) If all businesses, large and small, are responsible for their own actions, then construction companies will be able to obtain adequate insurance, the quality of construction will be improved, and workplace safety will be enhanced.
(b) Except as otherwise provided in paragraphs (c) and (d) of this subsection (6), any provision in a construction agreement that requires a person to indemnify, insure, or defend in litigation another person against liability for damage arising out of death or bodily injury to persons or damage to property caused by the negligence or fault of the indemnitee or any third party under the control or supervision of the indemnitee is void as against public policy and unenforceable.
C.R.S. 13-21-111.5 (statute as of April 2023).
This statute is re-printed in part here for your convenience. Based on this law, any construction contract provision that holds someone else responsible for the negligence of the indemnitee (the person being indemnified) is void and unenforceable. If you have any questions, do not hesitate to reach out. You may call us at 303-268-2867 or request a consultation via our online form.
The information contained on this website is provided for informational purposes only. It is not legal advice and should not be construed as providing legal advice on any subject matter. Laws frequently change and therefore this content is not necessarily up to date, nor comprehensive. Contact us or another attorney with any legal questions specific to your matter. You may request a consultation by calling us as 303-268-2867 or completing a consultation request form.