Our recent blog post explained the importance of indemnification provisions in construction contracts. A 2018 federal case has clarified just how carefully they must be drafted in order to have any meaning.
For background, section 11-4.1 of the Virginia Code is sometimes known as the “Anti-Indemnity Statute.” Under 11-4.1, any indemnification provision in a construction contract that obligates the contractor to indemnify another party to the contract for that other party’s negligence is unenforceable.
In the recent case, Travelers Indem. Co. v. Lessard Design, Inc.
A 2018 federal case shows just how costly a flow-down indemnification provision can be, and highlights just how carefully contracts should be read before signing.
Sometimes referred to as “hold harmless” provisions, the indemnification section of a design or construction contract can have profound legal consequences. The concept of indemnification is not complicated—indemnification is an agreement to assume a specific liability, potential or actual, of another party in the event of a loss. It involves shifting risk from one party to another—essentially as insurance. When a contractor or design professional indemnifies a client, she or he assumes some or all of the client’s potential or actual legal liabilities, which may ...
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