Indemnity gives a party protection against legal action because of a contract that they signed. In the construction industry, indemnity provisions can play a major role in the outcome of projects. In this article, a construction lawyer from Franklin, TN, discusses everything you need to know about indemnity provisions.
What Is an Indemnity Clause?
An indemnity clause, also known as a hold harmless clause, is a part of a construction agreement between two or more concerned parties, usually a landowner and/or contractor, regarding the responsibility for unexpected or unavoidable losses or damages during a construction job.
Types of Indemnity Clauses
There are different types of indemnity clauses available in different types of contracts. This includes broad form, intermediate form, and limited form.
In construction, a broad form indemnity clause is an important part of many contracts that provides for the indemnification of the contractor or subcontractor against claims by third parties for negligence, errors and omissions, breaches of representations, and other claims. Broadly, it may be described as a “disclaimer of warranty of the contractor or subcontractor.” If an indemnity is required from a contractor or subcontractor, that would usually be the “breadth” of the term.
The intermediary form allows construction companies to enter into a contract with their clients and includes limited coverage provisions. For example, the clause would require the contractor to indemnify the builder for any third party damage, which could be interpreted to mean that he would have to indemnify the builder for any injury caused by the builder while building the project, irrespective of whether or not the builder is at fault.
A limited form indemnity clause usually contains some limitations. The construction company is bound to indemnify the owner of the land for all the damage or injury that results from the construction work or any part of it. The person who hires the contractor is also bound to compensate the contractor for all damage or injury that results from his work.
Construction contracts are at the core of the project, and how you negotiate that contract makes a big difference in the outcome. Work with a lawyer to ensure that you have the right types of protection in your contracts. If you have questions about the kinds of software and documentation you may need, contact a construction law lawyer in Franklin, TN, from Cotney Construction Law.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.