CONTRACTUAL LIABILITY COVERAGE: STEPPING INTO THE UNKNOWN.
In the context of risk allocation, no single issue may be more significant than contractual liability coverage. An indemnity agreement is the foundation of contractual liability coverage and can potentially saddle an insured with tremendous additional exposure that was not contemplated at the time the policy was issued and premium dollars were accepted. Conversely, under the proper circumstances, an indemnity agreement can shift away losses that would otherwise be borne by the insured, and, ultimately, its insurance carrier. Even a valid indemnity agreement, however, may be of little practical benefit if contractual liability insurance does not support the indemnity obligation.
Because these issues frequently arise in the context of an owner/contractor or general contractor/subcontractor relationship, these coverage issues are discussed in the context of a commercial general liability policy.
BASIC INSURANCE PROVISIONS
Standard commercial insurance policy forms are developed and promulgated by Insurance Services Office, Inc. (ISO). In a standard ISO form commercial general liability policy, contractual liability coverage is normally provided through an exception to an exclusion.
The exclusion in the pre-1996 ISO form (the changes in the 1996, 1998 and 2001 forms are discussed later in this paper) provides as follows:
This insurance does not apply to:
"Bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages:
(1) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement; or (2) That the insured would have in the absence of the contract or agreement.
The term "insured contract" has several components under the standard ISO commercial liability coverage form, including contracts for lease of premises, sidetrack agreements, and elevator maintenance agreements. In the context of an owner/contractor or general contractor/subcontractor relationship, the relevant portion of the definition is as follows:
"That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for "bodily injury" or "property damage " to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of the contract or agreement."
The most important aspect of contractual liability coverage is whether the party seeking indemnity (the "indemnitee") has contractually required the other party (the "indemnitor") to "assume the tort liability" of the indemnitee to pay for bodily injury or property damage to a third party; if not, no contractual liability coverage is afforded. In order to make a determination of this issue, an examination of the contractual arrangement between the indemnitor and indemnitee is required.
Indemnity agreements are the primary contractual vehicles for shifting risk and reallocating liability. Because these seemingly innocuous clauses can also be used to shift a disproportionate share of the risk from one contractual party to the other party, impose unexpected obligations which may exceed available insurance coverage, and create a potential for liability that may extend well beyond the completion of the project, the provisions may function as a trap for the unwary. Accordingly, courts tend to view these agreements with disfavor.
However, no uniform standard has emerged for the interpretation and application of these provisions. The vast majority of jurisdictions require an interpretation of indemnity language that is stricter than the standard applied to general contract language. Most states have adopted a "strict" or "clear and unequivocal" standard for use in interpreting contractual indemnity agreements. A handful of others engage in case-by-case analysis, while still others apply the general "reasonable construction" or "plain language" contract analysis standard. Each standard is analyzed below.
Applicability of the Contract
In evaluating the enforceability of an indemnity agreement, the threshold inquiry is whether the contract between the indemnitor and the indemnitee applies to the claim or loss involved. Obviously, if the loss or claim is outside of the scope of the contract, the indemnity provision will not apply and no indemnity obligation exists. Determining whether the injury for which indemnity is claimed falls within the scope of the contract depends in large part on the jurisdiction in which the claim is brought and the language of the specific indemnity provision.
In determining whether the contract applies, courts have focused on whether the indemnitee's liability arose out of the work the indemnitor contracted to perform. This limitation is typically reflected in the contract language. If there is no causal connection between the indemnitee's liability and the work the indemnitor agreed to perform, the indemnity agreement should not apply. For instance, in Joe Adams & Son v. McCann Constr. Co., 475 S.W.2d 721, 722 (Tex. 1971), the general contractor, McCann, sought indemnity from the subcontractor, Joe Adams & Son. Joe Adams was a concrete subcontractor for McCann. McCann had erected wooden forms extending above ground level, and Joe Adams' employees were pouring concrete into these forms.
While the concrete was being poured, the forms collapsed, injuring three of Joe Adams' employees. The injured workers recovered against McCann, and McCann then sought indemnity from Joe Adams under an indemnity clause which required Joe Adams to provide indemnity for damage or injuries "through or on account of any act or in connection with the work of (Joe Adams)." McCann contended that the injuries occurred while the concrete was being poured and that the filling of the forms was the immediate cause of the collapse; consequently, the indemnity provision was applicable.
The Texas Supreme Court disagreed, holding that McCann's liability arose from an accident "that was proximately caused by its own want of care, and there is no suggestion that Adams or anyone under its supervision or control was at fault in any way." The court explained that indemnity provisions within a contract "are usually primarily to protect a general contractor against loss or liability resulting from operations or physical conditions over which he has no control and which are under the control of the subcontractor." Since Adams had no control or authority over the concrete forms, the supreme court found that indemnity was inappropriate.
Further, in Joe Adams, the court also adopted the "clear and unequivocal" test for establishing the validity of indemnity agreements. This test was later overruled by the Texas Supreme Court in Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705, 708 (Tex. 1987), in which the court adopted the "express negligence" test. In Ethyl Corp., however, the Court did not overrule the "causal connection" language from the Joe Adams case, and thus, that standard is still applicable.
Similarly, in Martin Wright Elec. Co. v. W.R. Grimshaw Co., 419 F.2d 1381 (5th Cir. 1969), the Fifth Circuit held that indemnity was not owed under a subcontract for payments made by a general contractor to the estate of a subcontractor's employee, who sustained fatal injuries. At the time of the accident, the employee had just finished storing tools, and, while leaving the area, tripped and fell over a dowel. The Fifth Circuit first rejected an argument that the indemnity agreement applied because the employee was in the scope of his employment at the time of his injury. The court found this fact did not necessarily answer the question of whether the employee's injuries arose in the performance of work within the contemplation of the indemnity clause. After examining the other facts, the court concluded that no indemnity was owed and explained as follows:
The injury to [the subcontractor's employee] in the instant case was caused by the negligence of Grimshaw [the indemnitee], and [neither] the lighting in the basement area, the wire mesh, the metal dowel nor Grimshaw's omissions in regard to them causing the injuries had any relation to, connection or involvement with the performance by Wright [the indemnitor] of the work covered by the subcontract, and Wright is not liable to Grimshaw under the indemnification provisions of the subcontract.
Courts in other jurisdictions have answered this kind of question more broadly, and more often find indemnity is owed. For example, in Vitty v. D.C.P. Corp., 633 A.2d 1040 (N.J. Super. App. Div. 1993), the court found that D.C.P., who operated a tow truck service, was bound by an indemnity agreement to defend and indemnify the New Jersey Highway Association. A D.C.P. truck driver was killed on the job, when a drunk driver struck another car on the highway, jumped a median, became airborne, and landed on the tow truck that was legally parked at a U-turn post. D.C.P. argued that the driver, although on duty, was not engaged in towing or wrecking activities when the accident occurred, therefore the indemnity agreement of the contract for towing and wrecking services did not apply. The court rejected this argument, looking to the language of the agreement, which provided indemnity for claims "arising out of" the contract:
We reject the contention that the phrase "arising out of" requires that the injury or property damage sustained must be the direct and proximate result of the performance of towing services in order for the indemnification clause to be triggered. Specifically, the license does not require that the claim of the injured party be directly and proximately caused by the operation of a tow truck in transit. Instead, the words "arising out of" should be construed in accordance with their common and ordinary meaning as referring to a claim "growing out of" or having its "origin in" the subject matter of the towing agreement.... So interpreted, there need be shown only a substantial nexus between the property damage or injury alleged in the claim and the activities encompassed in the towing contract.
Id. at 1012-43 (citations omitted) (emphasis added). The New Jersey court found that merely being engaged in activities related to those specifically contracted for at the time of the accident was sufficient to make the indemnity clause applicable to the claim.
Muirhead v. Transworld Drilling Co., 469 So.2d 474 (La. App. 3 Cir. 1985) offers an even more severe example of broad indemnity application. Aminoil and Transworld entered into a drilling contract under which Transworld would furnish a portable drilling unit and platform tender and have certain personnel on the rig. Aminoil was required to furnish the shore base where Transworld employees would park their cars, then board helicopters or boats to transport them offshore. Muirhead, a Transworld employee, was injured when he fell while walking across the shore base from the helicopter to his car. Muirhead sued Transworld and Aminoil, and Aminoil sought indemnity from Transworld under the contract. The indemnity agreement at issue applied to any and all claims "occurring, growing out of, incident to, or resulting directly or indirectly from" Transworld's work. Transworld argued that Muirhead was not working when he fell, and further, the shore base on which he fell was explicitly Aminoil's responsibility. The court disagreed and found that Muirhead was required to walk across the shore base as part of his work for Transworld. Specifically rejecting the narrower construction of indemnity agreements in Texas, the court found that the injury was caused, "directly or indirectly," from Muirhead's work with Transworld; therefore, the indemnity agreement was applicable to his claim.
In a more recent case from Alaska, the court found an indemnity agreement applied, even though the contract specifically excluded the work which allegedly caused the injury. In Hoffman Const. Co. of Alaska v. U.S. Fabrication & Erection, Inc. , 32 P.3d 346 (Alaska 2001), Providence Hospital contracted with Hoffman Construction for new construction and renovation on the Providence Hospital campus. The parties removed asbestos abatement responsibilities from the contract, although Hoffman retained the duty to coordinate its work and the work of its subcontractors on the asbestos abatement. One of the Hoffman subcontractors was U.S. Fabrication & Erection (USFE), who performed steel erection work on the South Tower simultaneous with asbestos abatement being performed on the same tower. Four USFE employees brought suit alleging they had been exposed to asbestos while working on the south tower. Providence sought indemnity in the suit, based on its contract with Hoffman providing indemnity for any claim "arising out of...the performance of this Construction Contract, regardless of whether or not it is caused in part by a party indemnified hereunder."
The court found that the plaintiffs' claims were within the scope of the indemnity clause, since Alaska has "interpreted similar indemnity clauses very broadly in the past and found that an employee's claims 'arise out of an indemnitor's performance if the injury occurs when the employee is on the job that is the subject of the indemnification agreement." Because the plaintiffs were USFE employees working under the Hoffman subcontract, their claims arose out of Hoffman's performance on the Providence contract. Accordingly, the Hoffman-Providence indemnity provision applied to their claims.
Parties wanting indemnification often attempt to draft provisions requiring indemnity in certain scenarios (such as injuries of the indemnitee's employees), regardless of whether a causal connection exists between the indemnitee's exposure and the indemnitor's work. In most instances, however, whether the indemnity agreement applies will depend on the law of the state applicable to the contract and may require a fact-intensive inquiry, by a judge or even a jury. If the facts of a particular case indicate that the indemnitee's liability is unrelated to the work the indemnitor has contracted to perform or outside the scope of work for which indemnity exists, the indemnitor may be able to successfully argue that no indemnity is owed.
The "Clear and Unequivocal" Interpretation
Once the indemnity provision is found to potentially apply to the claim or loss, a court must determine whether the provision is valid and enforceable. Jurisdictions have adopted varying methods to make this determination, but by far the most common is the "clear and unequivocal" approach. In jurisdictions adopting this approach, also referred to as "strict construction," the primary concern involves situations in which the indemnitor would be liable for the indemnitee's sole negligence. States following this approach include Alabama, Arizona, Colorado, Delaware, Illinois, Indiana, Iowa, Florida, Kansas, Missouri, Minnesota, New York, Ohio, South Carolina, Texas, Utah, Washington and Wisconsin.
These courts recognize that indemnity agreements are an intentional assignment or shifting of risk by parties to a contract. The issue that arises is whether the indemnitor should be required to indemnify the indemnitee for its sole negligence when the indemnitor might not have intended this result. Accordingly, many courts have decided that an indemnification agreement must clearly and unequivocally state that the parties contemplated and agreed to indemnify the specific situation in which indemnity is sought, including instances in which the indemnitee is solely responsible.
Courts in states adopting this rule have reached different methodologies for how it should be applied--some require a consideration of the bargaining power or sophistication of the parties, while others will only allow indemnity agreements in certain situations, like construction. But the common element is that courts will not enforce an indemnity agreement unless the language is unequivocally clear that the parties intended for the indemnitor to be responsible for the indemnitee's sole negligence.
Contractual indemnity agreements are common in contracts for construction work, and most states use a form of the "clear and unequivocal" approach to determine whether an indemnity agreement is valid in a construction situation. This standard has been sanctioned by the U.S. Supreme Court, and applied in a construction context, in U.S. v. Seckinger, 397 U.S. 203 (1970). In that case, an employee of a plumbing contractor was injured while working on a U.S. government project. Because the injury was allegedly due to the government's negligence, the employee sued the United States, and the government sought indemnity from the plumbing contractor based on the following clause: "[h]e (the contractor) shall be responsible for all damages to persons or property that occur as a result of his fault or negligence in connection with the prosecution of the work."
The Court rejected the government's argument that the contractor was required to provide indemnification for the government's sole negligence. The Court stated that where the parties intend that the indemnitee be indemnified for its sole negligence, such intent must be "clearly and unequivocally indicated." The Court found that the language before it did not contain such a clear and unequivocal intention, noting that the indemnity clause required the contractor to indemnify the government only to the extent of the contractor's negligence.
Since Seckinger, many cases have applied the "clear and unequivocal" test to determine an indemnity agreement's validity. Several recent cases are described below:
The Fifth Circuit applied Louisiana's "clear and unequivocal" approach in Dowling v. Georgia-Pacific Corp., 302 Fed.App. 283, (5th Cir. 2008). KBR contracted with owner Georgia-Pacific to perform work at one of Georgia-Pacific's facilities. Dowling, a KBR employee, was injured while working pursuant to the contract:
Dowling filed suit against Georgia-Pacific, alleging her injuries were the result of Georgia-Pacific's negligence. Georgia-Pacific filed a Third-Party Complaint against KBR and Pacific Employees Insurance Company, KBR's insurer, alleging KBR was required to defend and indemnify Georgia-Pacific against Dowling's claims. KBR filed a counterclaim against Georgia-Pacific alleging Georgia-Pacific's negligence was the cause of Dowling's injuries and that under the terms of the contract, Georgia-Pacific was required to reimburse KBR for the costs related to its defense of Dowling's claims. In April 2007, Georgia-Pacific settled Dowling's claims. KBR did not participate in the settlement. The settlement did not make any allocation of fault as between Georgia-Pacific and KBR.
Dowling at 284. The court looked to the language of the indemnity agreement to determine if it was sufficiently "clear and unequivocal" to allow full indemnity of Georgia-Pacific. The specific indemnity clause stated: "[t]o the extent the Loss is caused, in part, by the joint, concurrent or contributory negligence of G-P, its agent or employees, Contractor shall provide said indemnification to the extent or degree Contractor is the cause of or liable for the Loss." Id. at 286 (emphasis in original). The court determined that the agreement limited KBR's indemnity obligation to the degree of its own fault, therefore the language did not clearly and unequivocally allow Georgia-Pacific's indemnity for its sole negligence.
In Boulder Plaza Residential, LLC v. Summit Flooring, LLC, 198 P.3d 1217, (Colo.App. 2008), the court applied a commonly cited corollary of the "clear and unequivocal" rule, stating that the indemnity agreement does not necessarily have to include the word "negligence" to be considered clear and unequivocal. In Boulder Plaza, the construction managers, BPR, hired McCrerey as a general contractor to build several residential condo units. McCrerey subcontracted installation of hardwood floors to Summit. The floors were installed improperly, at great cost to the project, and largely could not be repaired. BPR sued McCrerey and Summit, who filed numerous counter and cross-claims against BPR and one another. One of the claims between the parties was that Summit was required to indemnify McCrerey pursuant to an indemnity agreement in the subcontract. BPR settled with McCrerey, McCrerey assigned BPR its rights against Summit, and the case between BPR and Summit went to trial. The trial judge determined that a finding of Summit's fault was required as an element of contractual indemnity. The jury failed to find Summit was negligent, and, therefore, returned a verdict against BPR on the contractual indemnity claim.
On appeal, BPR argued that the indemnity provision did not require a showing of Summit's negligence, and that Summit had an obligation to indemnify even if it was not negligent. Citing Colorado's strict construction of indemnity agreements, the court considered the language requiring Summit to indemnify McCrerey "against all claims for damage to persons and property growing out of the execution of the work ...." Id. at 1221-22 (emphasis in original). While acknowledging Colorado's rule that the indemnity provision need not include the word "negligence" to be enforceable, the language in the subject contract specifically limited the indemnity obligation to claims growing out of Summit's own work. Therefore, the provision was not sufficiently broad to require Summit to indemnify BPR absent a showing that Summit was at least partially negligent.
Because of rigid standards used by most courts in applying the "clear and unequivocal" test, there are far more published cases in which an indemnity agreement was held to be unenforceable than cases in which the agreement was upheld. In a recent Missouri case, however, the court enforced an indemnity agreement, finding that the language was sufficiently broad to clearly and unequivocally apply to a contractor's sole negligence. In Utility Service and Maintenance, Inc. v. Noranda Aluminum, Inc., 163 S.W.3d 910 (Mo. 2005), Utility contracted with Noranda to do industrial painting at a new Noranda manufacturing facility. As part of the contract, Utility agreed to Noranda's standard terms and conditions, which included an indemnity agreement stating:
Seller [Utility] shall indemnify and save Purchaser [Noranda] free and harmless from and against any and all claims, damages, liabilities or obligations of whatsoever kind, including, but not limited to, damage or destruction of property and injury or death of persons resulting from or connected with Seller's performance hereunder or any default by Seller or breach of its obligations hereunder.
Id. at 911-12. A Utility employee was severely injured while working under the Utility-Noranda contract, and sued Noranda, alleging its negligence caused his injuries. Citing the indemnity provision, Noranda requested defense and indemnity from Utility, who passed the claim on to its insurer, TIG. TIG assumed the defense and settled on Noranda's behalf, then sought a declaratory judgment that the indemnity agreement was unenforceable.
The Missouri Supreme Court decided that the indemnity language clearly and unambiguously applied to claims "including, but not limited to," Utility's performance. The court found there was nothing ambiguous about a requirement that one party indemnify the other for "any and all claims" in a commercial contract. Claims for Noranda's negligence were within the phrase "any and all claims."
While indemnity provisions are very common in construction-related contracts, they can be, and often are, included in other types of agreements. E.g. Azurak v. Corporate Property Investors, 790 A.2d 956 (N.J. Super. App. Div. 2002) (contract between mall and janitorial company for janitorial services); Vitty v. D.C.P. Corp., 633 A.2d 1040 (N.J. Super. App. Div. 1993) (contract between state highway authority and tow truck company for towing and wrecking services); Duty Free Shoppers Group Ltd. V. State, 777 P.2d 649 (Alaska 1989) (lease contract between state and shop at airport). State courts will generally apply the same interpretation rules to construction and non-construction contracts, though a few states have statutes limiting the type of contract in which an indemnity provision may be included. These statutes are discussed in more detail below.
Texas' Approach to Validity of the Indemnity Agreement
Under Texas law, parties may contract to redistribute future liability unless the agreement is unconstitutional, violates statutory law or is against public policy. See Valero Energy Corp. v. M.W. Kellogg Const. Co., 866 S.W.2d 252 (Tex. App.--Corpus Christi 1993, writ denied). Texas strictly construes the language of the agreement, but has also adopted two "fair notice" requirements for determining whether the agreement is valid--this two-step test is stricter than most other states. See Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705, 708 (Tex. 1987); Dresser Industries, Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993). An indemnity agreement is valid and enforceable only if the indemnity agreement satisfies both the "express negligence" test and "conspicuousness" requirements. U.S. Rentals, Inc. v. Mundy Serv. Corp., 901 S.W.2d 789, 791 (Tex. App.--Houston [14th Dist.] 1995, writ denied). In an opinion that reaffirmed the "fair notice" requirements, the Texas Supreme Court noted that these requirements exist and are enforced because of the "extraordinary risk-shifting" that is inherent in indemnity agreements. Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 193 (Tex. 2004). The Texas Supreme Court underscored the necessity for the "fair notice" requirements in indemnity agreements because of the possibility of the indemnitee avoiding liability for its sole negligence. The Court specifically reserved the two-part test for agreements involving an "extraordinary" degree of risk.
The Express Negligence Test
In the landmark decision, Ethyl Corp. v. Daniel Constr. Co., the Supreme Court of Texas adopted the "express negligence" test for cases involving contractual indemnity. 725 S.W.2d 705. Under this test, a party seeking to be indemnified for the consequences of its own negligence must express that intent in specific terms. The indemnity provision in question in Ethyl stated as follows:
"Contractor shall indemnify and hold owner harmless against any loss or damage to persons or property as a result of operations growing out of the performance of this contract and caused by the negligence or carelessness of Contractor, Contractor's employees, Subcontractors, and agents or licensees".
Applying the "express negligence" test, the court found that this indemnity language did not expressly provide that the indemnitee (the owner) was to be indemnified for its own negligence. Therefore, the court concluded that the indemnity agreement was not enforceable against the indemnitor (the contractor).
Under Ethyl, courts also held that indemnity would be limited to the extent of liability assumed--in other words, assumption of concurrent or comparative negligence will not extend to sole negligence. See, e.g., Amoco Oil v. Romaco, Inc., 810 S.W.2d 228, 229 (Tex. App.--Houston [14th Dist.] 1999, no writ); Jobs Bldg. Serv., Inc. v. Rom, Inc., 846 S.W.2d 867, 870 (Tex. App.--Houston [1st Dist.] 1992, writ denied). In another important decision, the Texas Supreme Court concluded that it is not necessary for an indemnitee to differentiate among the various degrees of negligent conduct (sole, joint, concurrent, etc.) in order to be entitled to indemnity for the consequences of its own negligence. Atlantic Richfield Co. v. Petroleum Personnel, Inc., 768 S.W.2d 724 (Tex. 1989). In Atlantic Richfield, the court found that the contractual language "including, but not limited to, any negligent act or omission of [the indemnitee]" met the express negligence standard
Since the Ethyl decision, the Texas Supreme Court and various Texas Courts of Appeals have rendered numerous opinions interpreting whether specific indemnity provisions complied with the "express negligence" standard. Most courts have applied the "express negligence" standard broadly, holding that if any doubt exists as to whether the indemnity provision expressly provides that the indemnitee is to be indemnified for its own negligence, the indemnity agreement is not valid under Texas law.
Unfortunately, however, there is no "bright-line" test for determining whether the language of an indemnity agreement complies with the "express negligence" test, and, in fact, the results reached by a few courts on this issue seem somewhat inconsistent. e.g. Banner Sign & Barricade, Inc. v. Price Construction, Inc., 94 S.W.3d 692, 694-97 (Tex. App.--San Antonio 2002, pet denied); Banzhaf v. ADT Sec. Sys. S.W., Inc., 28 S.W.3d 180 (Tex. App.--Eastland 2000, review denied); Tri-State Ins. Co. v. Rogers-O'Brien Constr. Co., 1997 WL 211534 (Tex. App.-Dallas, April 30, 1997); Glendale Constr. v. Accurate Air Sys., 902 S.W.2d 536, 539 (Tex. App.-Houston [1st Dist.] 1995, writ denied); Enserch Corp. v. Parker, 794 S.W.2d 2 (Tex. 1990); Amoco Oil Co. v. Romaco, Inc., 810 S.W.2d 228 (Tex. App.--Houston "14th Dist" 1989, no writ).
The "Conspicuousness" Test
To be enforceable under Texas law, in most instances, an indemnity agreement must also pass the "conspicuousness" requirement. Although this test had been discussed in prior opinions, in the case of Dresser Ind., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505 (Tex. 1993), the Texas Supreme Court incorporated this test and the "express negligence" test into the "fair notice" requirements.
In Dresser, the court adopted the standard for conspicuousness of documents contained in the Uniform Commercial Code for warranty agreements. Under this standard, an indemnity clause or release agreement is considered conspicuous "... when a reasonable person against whom the clause is to operate ought to have noticed it." Applying this standard, the Dresser court held that a release agreement contained in Dresser Industries' contract did not meet the conspicuousness standard because it was located on the back of the contract in a series of eighteen numbered paragraphs without headings or contrasting type. The court concluded that the release paragraphs were not conspicuous, and therefore, were unenforceable under Texas law. See also U.S. Rentals, Inc. v. Mundy Service Corp., 901 S.W.2d 789, 792 (Tex. App.--Houston [14th Dist.] 1995; writ denied) (finding that an indemnity agreement did not meet the "conspicuousness" requirement; the provision was the seventh of fifteen unrelated provisions set forth on the back of a written contract, and the heading and text of all fifteen provisions were printed in the same respective sizes and types). The Dresser court noted that a printed heading in capitals is considered conspicuous and language in the body of a form is conspicuous if it is in larger type or other contrasting type or color.
Notably, the Dresser court recognized an exception to the "conspicuousness" requirement, if the indemnitee establishes that the indemnitor possessed actual notice or knowledge of the indemnity agreement. Dresser, 853 S.W.2d at 508, fn. 2. Therefore, if the indemnitor is aware of the indemnity agreement at the time it executes the pertinent contract, the "conspicuousness" test is not applicable. See, e.g., McGehee v. Certainteed Corp., 101 F.3d 1078 (5th Cir. 1996) (holding that indemnity provision in contract did not comply with "conspicuousness" standard; however, fact question existed as to whether indemnitor had actual knowledge of indemnity agreement, precluding summary judgment in favor of indemnitor).
The Dresser court, and many opinions since Dresser, also referred to definition of "conspicuous" found in the Uniform Commercial Code and TEX. BUS. & COM. CODE ANN. [section]
(10) "Conspicuous," with reference to a term, means so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it. Whether a term is "conspicuous" or not is a decision for the court. Conspicuous terms include the following: (A) a heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size; and (B) language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.
This statute provides a general idea of what should be considered "conspicuous," but ultimately leaves the decision to the court's discretion. This allows courts to consider the specific and perhaps unique facts of a case before them, and weigh certain factors accordingly.
As discussed above, common law generally allows contracting parties to allocate the legal consequences of either party's negligence between them. While such transfers were at one time looked upon with skepticism and regarded as being against public policy, such considerations have, for the most part, been limited or abandoned completely. Many states have passed laws, however, that define the extent to which such risk transfers can be incorporated into a contract. These so-called "anti-indemnity" statutes pertain for the most part to construction contracts, because it is thought that participants in a hazardous activity like construction should be held to a high degree of accountability for their own negligent behavior. In states in which oil and gas production is prominent, similar statutes restrict the scope of permissible indemnification in oil and gas production contracts. A table of the existing anti-indemnity statutes is appended to this paper as Table 1.
Construction Anti-Indemnity Statutes
States that restrict indemnity agreements in contracts for construction-related activities permit either (1) indemnification to the extent of the indemnitor's negligence; or (2) indemnification for the concurrent negligence of the indemnitor and the indemnitee. These statutes prohibit indemnification for the indemnitee's sole negligence. In addition to the type of indemnity the statutes allow, they may also distinguish between public and private construction contracts.
Alaska, Arizona, Arkansas, California, Georgia, Hawaii, Idaho, Indiana, Maryland, Massachusetts, Michigan, New Jersey, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia, Washington, and West Virginia have statutes allowing indemnity for concurrent negligence of indemnitor and indemnitee.
Other states will allow indemnification only to the extent the indemnitor is negligent. These states include Arizona, California, Colorado, Connecticut, Delaware, Florida, Illinois, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, and Rhode Island.
Texas enacted the Anti-Indemnity Act on January 1, 2012. The Texas Anti-Indemnity Act prohibits and voids indemnity provisions contained in construction contracts that require an indemnitor (normally a subcontractor) to indemnify an indemnitee (normally the general contractor/owner) from the indemnitee's own negligence. See Sec. 151.102 of the Texas Insurance Code. Furthermore, this new statute prohibits and voids construction contracts requiring indemnitors to provide additional insured coverage for the negligence of the indemnitee.
Whether this Act applies to contracts for a particular construction project is determined by when the "original contract" was entered into by the parties. For example, if a Master Services Agreement for a project was entered into on December 31, 2011, but related subcontracts, purchase orders and/or insurance policies were not executed until 2012, the Anti-Indemnity Act would not apply to any of the contracts for this particular project since the "original contract" became effective in 2011.
Arizona and California, like many states, have different statutes for different types of construction contracts. Several states have separate statutes for public and private construction (California distinguishes residential, rather than public/private, construction contracts). Most states place the same restrictions on public and private indemnity contracts. However, Arizona permits indemnity of the indemnitor's negligence in public contracts and concurrent negligence in private contracts. California statutes allow indemnity for the indemnitor's negligence in residential construction, but allow indemnity for concurrent negligence in all other construction contracts.
Oil Field Anti-Indemnity Statutes
Wyoming, New Mexico, Louisiana, and Texas have laws restricting indemnification agreements as part of oil field and mining contracts. The Wyoming and New Mexico statues invalidate most oilfield indemnity agreements. The Louisiana statute restricts certain applications of indemnity agreements, and the Texas statute prohibits indemnity agreements which are not backed by insurance coverage.
The requirements for a valid oil field indemnity agreement are more strict in Texas than in any other state, because the agreement must comply with the statutory requirements and the "fair notice" requirements, as discussed above. As a result, many contracting parties now formulate indemnity agreements in compliance with Texas law, even if little or no work will be performed in Texas.
The Texas Oilfield Anti-Indemnity Act (TOAIA) prohibits one party from contractually shifting the risk of its own negligence to another party unless the agreement is supported by liability insurance. Tex. Civ. Prac & Rem. Code [section] 127.001 et seq. (West 2004). The TOAIA was enacted in 1973 in response to a perceived abuse in the drafting of indemnity provisions against drilling and other contractors. Oil well operators required these contractors to indemnify the operators for their own negligence when many of these contractors were having a difficult time obtaining liability insurance. The law is intended to limit the uninsured liability of these contractors. See Ken Petroleum Corp. v. Questor Drilling Corp., 24 S.W.3d 344, 348 (Tex. 2000) (discussing generally legislative history of TOAIA).
Chapter 127 of the Texas Civil Practice and Remedies Code states in relevant part: 127.001. Definitions
In this chapter:
(1) "Agreement pertaining to a well for oil, gas, or water or to a mine for a mineral:"
(i) a written or oral agreement or understanding concerning the rendering of well or mine services; or
(ii) an agreement to perform a part of those services or an act collateral to those services, including furnishing or renting equipment, incidental transportation, or other goods and services furnished in connection with the services; but
(B) does not include a joint operating agreement.
* * *
(3) "Mutual indemnity obligation" means an indemnity obligation in an agreement pertaining to a well for oil, gas, or water or to a mine for a mineral in which the parties agree to indemnify each other and each other's contractors and their employees against loss, liability, or damages arising in connection with bodily injury, death, and damage to property of the respective employees, contractors or their employees, and invitees of each party arising out of or resulting from the performance of the agreement.
(4) "Well or mine service":
(i) drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, purchasing, gathering, storing, or transporting oil, brine water, fresh water, produced water, condensate, petroleum products, or other liquid commodities, or otherwise rendering services in connection with a well drilled to produce or dispose of oil, gas, other minerals or water; and
(ii) designing, excavating, constructing, improving, or otherwise rendering services in connection with a mine shaft, drift, or other structure intended for use in exploring for or producing a mineral; but
(B) Does not include:
(i) purchasing, selling, gathering, storing, or transporting gas or natural gas liquids by pipeline or fixed associated facilities; or
(ii) construction, maintenance, or repair of oil, natural gas liquids, or gas pipelines or fixed associated facilities.
* * *
(5) "Unilateral indemnity obligation" means an indemnity obligation in an agreement pertaining to a well for oil, gas or water or to a mine for a mineral in which one of the parties as indemnitor agrees to indemnify the other party as indemnitee with respect to claims for personal injury or death to the indemnitor's employees or agents or to the employees or agents of the indemnitor's contractors but in which the indemnitee does not make a reciprocal indemnity to the indemnitor.
Section 127.003. Agreement Void and Unenforceable
(a) Except as otherwise provided by this chapter, a covenant, promise, agreement, or understanding contained in, collateral to, or affecting an agreement pertaining to a well for oil, gas, or water or to a mine for a mineral is void if it purports to indemnify a person against loss or liability for damage that:
(1) is caused by or results from the sole or concurrent negligence of the indemnitee, his agent or employee, or an individual contractor directly responsible to the indemnitee; and
(2) arises from:
(A) personal injury or death;
(B) property injury;
(C) any other loss, damage, or expense that arises from personal injury, death, or property injury.
* * *
Section 127.005. Insurance Coverage
(a) This chapter does not apply to an agreement that provides for indemnity if the parties agree in writing that the indemnity obligation will be supported by liability insurance to be furnished by the indemnitor subject to the limitations specified in Subsection (b) or (c).
(b) With respect to a mutual indemnity obligation, the indemnity obligation is limited to the extent of the coverage and dollar limits of insurance or qualified self-insurance each party as indemnitor has agreed to obtain for the benefit of the other party as indemnitee.
(c) With respect to a unilateral indemnity obligation, the amount of insurance required may not exceed $500,000.
Under the TOAIA, the obligation in the "mutual indemnity agreement" scenario provides that the indemnity is limited to the extent of insurance coverage and the dollar limits each party has agreed to obtain for the benefit of the other. See id. In Ken Petroleum Corp. v. Questor Drilling Corp., the Texas Supreme Court clarified that this section of the statute mandates only that the mutual indemnity obligations are limited to: (i) if the parties agree to provide differing amounts of coverage, the lower amount of insurance or (ii) if the agreement specifically states the dollar amount of insurance one party is to provide, but is silent as to the other party's specific obligation, the amount of insurance which is equally provided. 24 S.W.3d 344, 350-51 (Tex. 2000) [overruling Weber Energy Corp. v. Grey Wolf Drilling Co., 976 S.W.2d 766 (Tex. App-Houston [1st Dist.] 1998) and Ken Petroleum Corp. v. Questor Drilling Corp., 976 S.W.2d 283 (Tex. App-Corpus Christi, 1998)].
In attempting to determine whether contractual coverage is available, it is important to keep in mind that: (1) the coverage is provided to the named insured, and not the indemnitee, and (2) virtually all of the limitations and conditions to coverage that apply to a direct claim for insurance by the insured also apply in the context of contractual liability insurance. The claim must involve "bodily injury" or "property damage" caused by an "occurrence" and meet the other requirements of the insuring agreement to Coverage A of the policy. Also, most of the exclusions in a liability policy, with the general exception of the "employer's liability" exclusion, apply to the contractual liability coverage. For example, if an indemnitee is seeking indemnity from an insured for liability that clearly involves bodily injury or property damage arising out of pollution, the policy's "pollution exclusion" may bar coverage. Of course, these types of coverage issues should be analyzed for any claim or suit involving an insured.
Because of the tripartite relationship among the insurer, the insured, and the third-party indemnitee, several unique coverage issues may arise.
The Indemnitee's Defense Costs
Several years ago a major issue concerning contractual liability insurance was whether coverage is afforded for defense costs incurred by the indemnitee. The 1996 commercial general liability coverage form (CG 00 01 96) issued by ISO clarifies this issue to some degree. (For policies with ISO forms preceding the 1996 form this issue is unresolved.) The 1996 ISO form (carried through to the 1998 and 2001 ISO forms) added language intended to clarify the issue of whether defense costs are covered. The ISO form provides the following relevant provision in regard to contractual liability coverage:
(1) This insurance does not apply to:
"bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages:
* * *
(2) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement. Solely for the purposes of liability assumed in an "insured contract"; reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of "bodily injury" or "property damage"; provided
(a) Liability to such party for, or for the cost of, that party's defense has also been assumed in the "insured contract"; and
(b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged.
Under these provisions, defense costs incurred by an indemnitee are covered by a CGL policy if: (1) the indemnity agreement between the insured and the indemnitee requires the insured to indemnify defense costs; and (2) the defense costs are incurred in a civil or alternative dispute resolution proceeding in which the damages (bodily injury or property damage) is otherwise covered by the policy. Thus, if the indemnity agreement does not specifically indicate that indemnification of defense costs is required or if the underlying damages are not covered by the policy, the indemnitee's defense costs are not covered by the policy.
Indemnitee's Defense Costs - "Expense" or "Loss" Item
Assuming the indemnitee's defense costs are covered or that the insurer merely agrees to pay those defense costs, an issue arises as to whether those costs are treated as an "expense" item and fall under the "supplementary payments" part of the policy or whether the costs are a "loss" item and reduce the policy limits.
The pre-1996 ISO forms did not address this issue. The 1996 and subsequent ISO forms include language in the "supplementary payments" section of the policy, explaining when an indemnitee's defense costs will be considered a "supplementary payment" or "expense" item and will not reduce the limits:
SUPPLEMENTARY PAYMENTS--COVERAGES A AND B
1. If we defend an insured against a "suit" and an indemnitee of the insured is also named as a party to the "suit", we will defend that indemnitee if all of the following conditions are met:
a. The "suit" against the indemnitee seeks damages for which the insured has assumed the liability of the indemnitee in a contract or agreement that is an "insured contract";
b. This insurance applies to such liability assumed by the insured;
c. The obligation to defend, or the cost of the defense of, that indemnitee, has also been assumed by the insured in the same "insured contract";
d. The allegations in the "suit" and the information we know about the "occurrence" are such that no conflict appears to exist between the interests of the insured and the interests of the indemnitee;
e. The indemnitee and the insured ask us to conduct and control the defense of that indemnitee against such "suit" and agree that we can assign the same counsel to defend the insured and the indemnitee; and
f. The indemnitee:
(1) Agrees in writing to:
(a) Cooperate with us in the investigation, settlement, or defense of the "suit";
(b) Immediately sends us copies of any demands, notices, summonses or legal papers received in connection with the "suit";
(c) Notify any other insurer whose coverage is available to the indemnitee; and
(d) Cooperate with us with respect to coordinating other applicable insurance available to the indemnitee; and
(2) Provides us with written authorization to:
(a) Obtain records and other information related to the "suit"; and
(b) Conduct and control the defense of the indemnitee in such "suit".
So long as the above conditions are met, attorneys' fees incurred by us in the defense of that indemnitee, necessary litigation expenses incurred by us and necessary litigation expenses incurred by the indemnitee at our request will be paid as Supplementary Payments. Notwithstanding the provisions of Paragraph 2.b.(2) of Section I--Coverage A--Bodily Injury And Property Damage Liability, such payments will not be deemed to be damages for "bodily injury" and "property damage" and will not reduce the limits of insurance.
Our obligation to defend and insured's indemnitee and to pay for attorneys' fees and necessary litigation expenses as Supplementary Payments ends when:
a. We have used up the applicable limit of insurance in the payment of judgments or settlements; or
b. The conditions set forth above, or the terms of the agreement described in Paragraph f. above, are no longer met.
Although this change to the policy appears to be significant, given the extent of the conditions and requirements, its impact has generally been minimal.
Possibly the greatest hurdle to overcome is set forth in the very first paragraph, requiring both the insured and the indemnitee be defendants in the same lawsuit. Often, the insured is not a party to the lawsuit because the insured's employee is the claimant bringing the suit, and a state's workers compensation laws will prohibit a direct suit against the employer. In this instance, the provisions would not apply, and the defense costs would be considered a "loss" item, reducing the limits.
Another major obstacle is that the provisions require that "no conflict appears to exist between the interest of the insured and the interest of the indemnitee," and the indemnitee and the insured agree that the insurer can assign the same counsel to defend both parties. In a case in which both the insured and the indemnitee are defendants in the suit, which would usually involve a claim by a party not employed by the insured, conflicts of interest certainly can, and often do, exist. For instance, if the indemnitee is entitled to indemnity for damages caused by its concurrent negligence, but not its sole negligence, the indemnitee will almost certainly attempt to place a portion of the responsibility on some other party--possibly the insured/indemnitor. Under this scenario, a conflict would exist and separate counsel would be required for each party. Again, the indemnitee would be unable to comply with this condition and defense cost incurred by the indemnitee would reduce the policy limits.
Possibly the most problematic aspect of the revision is the requirement that the indemnitee notify any "other insurer whose coverage is available to the indemnitee" and cooperate with the insurer with respect to "coordinating other applicable insurance available to the indemnitee." The drafters of the provision may have intended that the indemnitee notify only the insurers of other indemnitors (such as other contractors that may have indemnity agreements with the indemnitee) and cooperate with the insurer in coordinating coverage under those policies. Certainly, however, it appears that the intent of the provision is to include insurance coverage that is directly available to the indemnitee. Few, if any, indemnitees are likely to agree with this condition since the entire purpose of an indemnity agreement is to shift the risk involved to the indemnitor or the indemnitor's insurers. Further, as explained below, contribution by the indemnitee's own insurer completely ignores the fact that the indemnitee, or its insurer, is not ordinarily subject to the "other insurance" provision of the indemnitor's CGL policy.
Typically, a commercial liability policy includes an "Other Insurance" clause with the following introductory language:
If other valid and collectible insurance is available to the insured, for a loss recovered under Coverages A or B of this Coverage Part, our obligations are limited as follows.... (Emphasis added).
The policy indicates that the term "insured" means any person or organization qualifying as such under the "Who is an Insured" section of the policy. An indemnitee does not qualify under this section and, therefore, is not an insured. Thus, the "other insurance" provisions of the policy do not apply in the context of contractual liability coverage, and the insurer of the indemnitor generally has no right of contribution from the indemnitee's insurer.
Occasionally, a dispute may arise over the allocation of defense costs and indemnity when the indemnitee under an enforceable indemnity agreement also qualifies as an additional insured under the indemnitor's policy. In that circumstance, the indemnitor's insurer may argue that, because of the additional coverage, it is entitled to seek contribution from the indemnitee's insurer under the "other insurance" clause, irrespective of the valid indemnity agreement. The Fifth Circuit, however, interpreting Texas law, held that the indemnitor's insurer does not have a claim for contribution in this context. See American Indem. Lloyds v. Travelers Prop. & Cas. Ins. Co., 335 F.3d 429, 436 (5th Cir. 2003). The court agreed with the rationale of other jurisdictions addressing the issue, concluding that the indemnity agreement should control. Id. If the "other insurance" provisions were to be determinative, the parties' indemnity agreement would be negated and impose liability on the indemnitee's insurer when the indemnitee had specifically bargained to avoid that result as part of the consideration in its contract.
As you can see, an insurer may never know exactly what potential liability it faces when issuing a standard insurance policy. However, having an appreciation for the underlying contracts to which the "insured contract" policy provisions may apply, including understanding obligations found in those contracts to defend others or indemnify for attorney fees and litigation costs, is critical to managing an insurer's risk exposure. It is critical that the nature of the risk is understood and that sufficient information is submitted to the underwriter for evaluation and pricing during the underwriting process. Thus, the first line of defense for insurers wishing to minimize the risk of contractual liability claims to which their policies may be exposed is a thorough vetting of applications during the underwriting process. The underwriting process requires careful diligence--not only to appropriately analyze the risk presented and to price a policy's premiums, but also to determine whether declining to underwrite the risk at all might be the most fiscally responsible course.
TEX. BUS. & COM. CODE ANN. [section] 1.201(10)
TEX. CIV. PRAC & REM. CODE [section] 127.001 (West 2004)
TEXAS INS. CODE [section]151.102
American Indem. Lloyds v. Travelers Prop. & Cas. Ins. Co., 335 F.3d 429, 436 (5th Cir. 2003)
Amoco Oil v. Romaco, Inc., 810 S.W.2d 228, 229 (Tex. App.-Houston [14th Dist.] 1999, no writ)
Atlantic Richfield Co. v. Petroleum Personnel, Inc., 768 S.W.2d 724 (Tex. 1989)
Azurak v. Corporate Property Investors, 790 A.2d 956 (N.J. Super. App. Div. 2002)
Banner Sign & Barricade, Inc. v. Price Construction, Inc. , 94 S.W.3d 692, 694-97 (Tex. App.--San Antonio 2002, pet denied)
Banzhaf v. ADT Sec. Sys. S.W., Inc., 28 S.W.3d 180 (Tex. App.--Eastland 2000, review denied)
Boulder Plaza Residential, LLC v. Summit Flooring, LLC, 198 P.3d 1217, (Colo.App. 2008)
Dowling v. Georgia-Pacific Corp., 302 Fed.App. 283, (5th Cir. 2008)
Dresser Industries, Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993)
Duty Free Shoppers Group Ltd. V. State, 777 P.2d 649 (Alaska 1989)
Enserch Corp. v. Parker, 794 S.W.2d 2 (Tex. 1990)
Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705, 708 (Tex. 1987)
Glendale Constr. v. Accurate Air Sys., 902 S.W.2d 536, 539 (Tex. App.--Houston [1st Dist.] 1995, writ denied)
Hoffman Const. Co. of Alaska v. U.S. Fabrication & Erection, Inc., 32 P.3d 346 (Alaska 2001)
Jobs Bldg. Serv., Inc. v. Rom, Inc., 846 S.W.2d 867, 870 (Tex. App.-Houston [1st Dist.] 1992, writ denied).
Joe Adams & Son v. McCann Constr. Co., 475 S.W.2d 721, 722 (Tex. 1971)
Ken Petroleum Corp. v. Questor Drilling Corp., 24 S.W.3d 344, 348 (Tex. 2000)
Ken Petroleum Corp. v. Questor Drilling Corp., 976 S.W.2d 283 (Tex. App-Corpus Christi 1998)
Martin Wright Elec. Co. v. W.R. Grimshaw Co., 419 F.2d 1381 (5th Cir. 1969)
McGehee v. Certainteed Corp., 101 F.3d 1078 (5th Cir. 1996)
Muirhead v. Transworld Drilling Co., 469 So.2d 474 (La. App. 3 Cir. 1985)
Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 193 (Tex. 2004)
Tri-State Ins. Co. v. Rogers-O'Brien Constr. Co., 1997 WL 211534 (Tex. App.-Dallas, April 30, 1997)
U.S. v. Seckinger, 397 U.S. 203 (1970)
U.S. Rentals, Inc. v. Mundy Serv. Corp., 901 S.W.2d 789, 791 (Tex. App.--Houston [14th Dist.] 1995, writ denied)
Utility Service and Maintenance, Inc. v. Noranda Aluminum, Inc., 163 S.W.3d 910 (Mo. 2005)
Valero Energy Corp. v. M.W. Kellogg Const. Co., 866 S.W.2d 252 (Tex. App.--Corpus Christi 1993, writ denied)
Vitty v. D.C.P. Corp., 633 A.2d 1040 (N.J. Super. App. Div. 1993)
Weber Energy Corp. v. Grey Wolf Drilling Co., 976 S.W.2d 766 (Tex. App-Houston [1st Dist.] 1998
About the Authors:
Jim Isbell graduated from South Texas College of Law in 1983. Jim is a partner at Thompson, Coe, Cousins and Irons, LLP in Houston, Texas. Jim represents corporations, insurance companies, contractors and manufacturers in litigation relating to toxic and environmental issues, insurance questions, commercial disputes, construction/construction defect, and, additionally, casualty claims relating to both the maritime and energy fields.
Stephanie Massey graduated from South Texas College of Law in 2008, and worked in private practice for six years with a focus on insurance defense matters, representing clients in state and federal courts across the state of Texas. In 2014, Stephanie joined AIG as in-house counsel. She currently manages claims litigation matters for AIG Life and Retirement, including individual and group life, accidental death and dismemberment, and accident and health benefit claims.
Diana Brown graduated from South Texas College of Law in 2002, and worked in private practice for twelve years with a focus on insurance coverage and civil ligation matters, representing clients in state and federal courts across the state of Texas. Currently, Diana is an Assistant Professor of Business Law at Sam Houston State University.
James Isbell Thompson
Coe Cousins & Irons LLP
Attorney at Law
Sam Houston State University
TABLE 1 GENERAL SUMMARY OF ANTI-INDEMNITY STATUTES AND LAWS ALABAMA No statute ALASKA Alaska Stat. [section] 45.45.900 ARIZONA A.R.S. [section][section] 32-1159, 34-226, 41-2586 ARKANSAS Ark. Code [section][section] 4-56- 104; 22-9-214 CALIFORNIA Civ. Code [section][section] 2782, 2782.05 COLORADO Colo. Rev. Stat. [section][section] 13- 50.5-102; 13-21-111.5 CONNECTICUT Conn. Gen. Stat. [section] 52- 572k DELAWARE Del. Code, Title 6 [section] 2704 FLORIDA Fla. Stat. [section] 725.06 GEORGIA Ga. Code [section] 13-8-2 HAWAII Hawaii Rev. Stat. [section] 431:10-222 IDAHO Idaho Rev. Stat. [section] 29- 114 ILLINOIS 740 I.L.C.S. [section] 35/0.01, et seq. ([section] 35/1-3) INDIANA Ind. Code [section] 26-2-5 IOWA Iowa Code [section] 537 A.5 KANSAS Kansas Stat. [section] 16-121 KENTUCKY Kentucky Rev. Stat. [section] 371.180 GEORGIA Ga. Code [section] 13-8-2 HAWAII Hawaii Rev. Stat. [section] 431:10-222 IDAHO Idaho Rev. Stat. [section] 29- 114 ILLINOIS 740 I.L.C.S. [section] 35/0.01, et seq. ([section] 35/1-3) INDIANA Ind. Code [section] 26-2-5 IOWA Iowa Code [section] 537 A.5 KANSAS Kansas Stat. [section] 16-121 KENTUCKY Kentucky Rev. Stat. [section] 371.180 NEVADA N.R.S. [section] AB 125, [section] 2 NEW N.H. Rev. Stat. [section][section] 338- A:1; HAMPSHIRE 338-A:2 NEW JERSEY N.J. Stat. [section] 2A:40A-1 NEW MEXICO N.M. Stat. [section] 56-7-1 NEW YORK N.Y. Gen. Oblig. Laws [section] 5-322.1 NORTH N.C. Gen. Stat. [section] 22B-1 CAROLINA NORTH N.D.Cent.Code 9-08-02 DAKOTA OHIO Ohio Rev. Stat. [section]2305.31 OKLAHOMA 15 Okla. Stat. [section] 221 OREGON Or. Rev. Stat. [section] 30.140 PENNSYLVANIA Pa. Stat., Title 68, [section] 491 RHODE ISLAND R.I. Gen. Law [section] 6-34-1 SOUTH S.C. Code [section] 32-2-10 CAROLINA SOUTH S.D. Codified Laws [section] 56-3-18 DAKOTA TENNESSEE Tenn. Code [section] 62-6-123 TEXAS Tex. Ins. Code [section][section] 151.102, 151.103 UTAH Utah Code [section] 13-8-1 VERMONT No statute VIRGINIA Va. Code [section] 11-4.1 WASHINGTON Wash. Rev. Code [section] 4.24.115 WEST VIRGINIA W. Va. Code [section] 55-8-14 WISCONSIN Wis. Stat. [section] 895.447 WYOMING Wyo. Stat. [section] 30-1-131
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|Author:||Thompson, James Isbell; Massey, Stephanie; Brown, Diana|
|Publication:||International Journal of Business and Public Administration (IJBPA)|
|Date:||Dec 22, 2017|
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