Anti-Indemnity Statute – Definition

Cite this article as:"Anti-Indemnity Statute – Definition," in The Business Professor, updated March 2, 2020, last accessed August 9, 2020, https://thebusinessprofessor.com/lesson/anti-indemnity-statute-definition/.

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Anti-Indemnity Statute Definition

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.

A Little More on What is an Anti-Indemnity Statute

An anti-indemnity statute is often used in constructing 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.

Reference for “Anti-Indemnity Statute”

https://www.investopedia.com/terms/a/antiindemnity-statute.asp

https://www.irmi.com/term/insurance-definitions/anti-indemnity-statute

https://www.irmi.com/articles/expert…/contractual-requirements-anti-indemnity-statute…

https://www.lexology.com/library/detail.aspx?g=4e52fe00-00f6-40a5-987b…

https://content.next.westlaw.com/Document/…/View/FullText.html?contextData…

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 Statutes and Related Case Law, 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. LJ21, 359.

Enforcing Limitation of Liability Provisions in Owner/Architect/Engineer Contracts, 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/Engineer Contracts, Fox, R. R., & Wolff, L. (1995). Enforcing Limitation of Liability Provisions in Owner/Architect/Engineer Contracts. Def. Counsel J.62, 407.

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