In its most recent session, the Georgia General Assembly passed HB 943, which amends Georgia’s Anti-Indemnity Statute. The amendment expands the Anti-Indemnity Statute beyond construction contracts to include contracts for engineering, architectural, and land surveying services (“A/E Contracts”).
In a prior post, we discussed Georgia’s Anti-Indemnity Statute, which generally prohibits indemnity clauses in construction contracts that require one party (the “Indemnitor”) to indemnify another party (the “Indemnitee”) if property damage or bodily injury results from the Indemnitee’s sole negligence. The prior post discussed the Supreme Court of Georgia’s broad interpretation of the Anti-Indemnity Statute.
HB 943 adds subpart (c), which states:
A covenant, promise, agreement, or understanding in or in connection with or collateral to a contract or agreement for engineering, architectural, or land surveying services purporting to require that one party to such contract or agreement shall indemnify, hold harmless, insure, or defend the other party to the contract or other named indemnitee, including its, his, or her officers, agents, or employees, against liability or claims for damages, losses, or expenses, including attorney fees, is against public policy and void and unenforceable, except for indemnification for damages, losses, or expenses to the extent caused by or resulting from the negligence, recklessness, or intentionally wrongful conduct of the indemnitor or other persons employed or utilized by the indemnitor in the performance of the contract. This subsection shall not affect any obligation under workers’ compensation or coverage or insurance specifically relating to workers’ compensation, nor shall this subsection apply to any requirement that one party to the contract purchase a project specific insurance policy or project specific policy endorsement.
(Emphasis added.)
While the added subsection governing A/E Contracts is similar to the existing language governing construction contracts, it contains several notable differences. First, the amendment applies to indemnity provisions covering more than just bodily injury and property damage. In fact, the amendment does not appear to limit its scope to any particular type of damages.
Second, whereas the existing language limited its scope to indemnity clauses covering damages caused by the Indemnitee’s sole negligence, the amendment’s scope does not contain such a limitation. But it expressly does not apply to indemnity clauses covering damages caused by the negligence, recklessness or intentional wrongdoing of the Indemnitor or persons employed or utilized by the Indemnitor. Thus, to the extent a party to an A/E Contract causes damages for which it is required to indemnify the other party, the indemnity clause will remain enforceable. Apparently, the amendment targets indemnity provisions requiring a party not at fault to indemnify a party who is at fault.
Similar to the existing language, the amendment adopts an exception that permits a contract to require one party to purchase a particular form of insurance to cover project-related risks, and it does not affect workers’ compensation or related coverages.
Members of the construction industry should review their A/E Contracts to determine whether they comply with the newly amended Anti-Indemnity Statute.