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

• Insurance Law (Intro)
• What is insurance?
• Captive Agent
• Independent Agent
• Captive Insurance Company
• Underwriter 
• Combined Ratio
• Claims Adjuster
• Capital at Risk
• Assigned Risk
• Contingency
• Incurred But Not Reported
• Actuary
• Qualified Actuary
• Cession (Re-Insurance)
• Burning Cost Ratio
• What is an insurance contract?
• Accidental Means
• Anti-stacking Provisions
• What is an insurable interest?
• What are the common categorizations of insurance?
• National Association of Insurance Commissioners
• Insurance Regulatory Information System
• American Academy of Actuaries Definition
• American Association of Insurance Services Definition
• American Council of Life Insurance Definition
• American Insurance Association Definition
• American Risk and Insurance Association Definition
• LLoyd's of London
• Associate in Insurance Services (AIS) Definition
• Associate in Loss Control Management Definition
• Associate in Marine Insurance Management Definition
• Associate in Personal Insurance Definition
• Associate in Reinsurance (ARe) Definition
• Associate in Risk Management Definition
• Associate in Commercial Underwriting Definition
• Associate in Insurance Accounting and Finance Definition
• Associate in Surplus Lines Insurance Definition
• Chartered Insurance Professional Definition
• Chartered Life Underwriter Definition
• Chartered Property Casualty Underwriter Definition
• Vehicle insurancePrivate Passenger Auto Insurance Risk Profile
• Underinsured Motorist Coverage
• Uninsured Motorist Coverage
• Omnibus Clause
• Health insurance
  
• Health Maintenance Organization
• Capitated Contract
• Point of Service Plan
• Children's Health Insurance Program
• Disability Insurance?
• Credit Disability Insurance
• Life Insurance?
• Cash Surrender Value
• Absolute Beneficiary
• Acceleration Life Insurance
• Accelerated Benefit
• Accelerated Option
• Accelerative Endowment
• Charitable Gift Life Insurance
• Incontestability Clause
• Waterfall Concept
• Annuitization
• Assumed Interest Rate
• Clean Sheeting
• Hazard Insurance 
• Homeowners, Renters, and Fire Insurance?
• Participating Community (Flood Insurance)
• Insurance Considerations for Business
• Business Liability Insurance
• Commercial General Liability
• Liability Risk Retention Act
• Excess Insurance and Umbrella Insurance Policy
• Business Interruption Insurance
• Key Person Insurance Definition
• Own-Occupation Policy
• Self-Funded Health Insurance Plan
• Basket Retention Policy
• Commercial Blanket Bond
• Alternative Risk Transfer Market Definition
• Commercial Property Casualty Market Index Survey
• What are the primary obligations of the insurer?
• Earned Premium
• Reservation of Rights Letter
• Subrogation
• Collateral Source Rule
• What are the primary obligations of the insured?
• Insurance Premium
• Cooperation Clause
  
• Coinsurance
• Co-Pay
• Affidavit of Loss
• What is the general structure of an insurance contract?
• Ambiguity Principle
• Accommodation Line
• What are the common disputed provisions in an insurance contract?
• Absolute Exclusion
• All Risks Clause
• What is required for the termination of an insurance contract?
• Risk Management
• Professional Risk Manager
• Associate in Management (AIM)
• Financial Risk Manager
• Forecasting (Business)
• Objective Probability
• Unconditional Probability
• Enterprise Risk Management (ERM)
• Operational Risk
• Business Recovery Risk
• Political Risk
• Asset Protection
• Performance Bond
• Barra Risk Factor Analysis Definition
• Above Ground Risk (Mining Industry)
• Bumbershoot Policy (Maritime)
• Abandonment Clause (Boat or Vessel)
• Bobtail Liability Insurance (Trucking Industry)
• Anti-Indemnity Statute (Construction)