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Anti-Indemnity Statute - Explained

What is an Anti-Indemnity Statute?

Written by Jason Gordon

Updated at September 27th, 2021

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Table of Contents

What is an Anti-Indemnity Statute?How is an Anti-Indemnity Statute Used?Indemnity ProvisionsAcademics Research on Anti-Indemnity Statute

What is an Anti-Indemnity Statute?

An anti-indemnity statute is a legal agreement in construction contracts that states the degree of liability that can be transferred between the parties involved in the contract, such as a contractor and subcontractor. An anti-indemnity statute offers protection to a subcontractor against risks and liabilities that might take from the contractor. According to this statute, there is a limit to the risk of liability that one party can transfer to another in a contract.

Back To: INSURANCE & RISK MANAGEMENT

How is an Anti-Indemnity Statute Used?

An anti-indemnity statute is often used in construction contracts, the insurance industry and in the financial context. This statute regulates the transfer of risk between parties in a contract. In the construction industry, the anti-indemnity statute came as a response to imbalances that occur between contractors and subcontractors in terms of who takes the higher risk. In the absence of this statute, subcontractors incur significant liabilities even when they weren't the cause of the problem or liability. For instance, without the anti-indemnity statute, a contractor may transfer liabilities to subcontractors even when the damages were a result of negligence or incompetence of the contractor. In the insurance industry, risks are transferred to insurers by policyholders in exchange for the payment of premiums.

Indemnity Provisions

Many states have enacted the anti-indemnity statute which prevents parties in a contract from enforcing indemnification agreements. There are other ways through which states deal with indemnity agreements if an anti-indemnity statute is not a place. Ultimately, many states frown at indemnity agreements and find ways to curb it.

Related Topics

  • Above Ground Risk (Mining Industry)
  • Bumbershoot Policy (Maritime)
  • Abandonment Clause (Boat or Vessel)
  • Bobtail Liability Insurance (Trucking Industry)
  • Anti-Indemnity Statute (Construction)

Academics Research on Anti-Indemnity Statute

  • The Texas and Louisiana Anti-Indemnity Statutes as Applied to Oil and Gas Industry Offshore Contracts, Tade, J. B. (1987). The Texas and Louisiana Anti-Indemnity Statutes as Applied to Oil and Gas Industry Offshore Contracts.Hous. L. Rev.,24, 665. 
  • Fifty-State Survey of Anti-Indemnity Statutesand Related CaseLaw, Gwyn, A. H., & Davis, P. E. (2003). Fifty-State Survey of Anti-Indemnity Statutes and Related Case Law.Constr. Law.,23, 26.
  • Insuring Contractual Indemnity Agreements under CGL, MGL, and P& (and) I Policies, O'Neil, W. E. (1996). Insuring Contractual Indemnity Agreements under CGL, MGL, and P& (and) I Policies.Tul. Mar. LJ,21, 359. 
  • Enforcing Limitation of Liability Provisions in Owner/Architect/EngineerContracts, Fox, R. R., & Wolff, L. (1995). Enforcing Limitation of Liability Provisions in Owner/Architect/Engineer Contracts.Def. Counsel J.,62, 407.
  • Enforcing Limitation of Liability Provisions in Owner/Architect/EngineerContracts, Fox, R. R., & Wolff, L. (1995). Enforcing Limitation of Liability Provisions in Owner/Architect/Engineer Contracts.Def. Counsel J.,62, 407.
anti-indemnity statute antiindemnity statute

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