Indemnity provisions of the contracts executed between a project owner and its contractors, architects and other professionals are critical elements in transferring risk of third-party claims such as property damage and personal injury. An indemnity provision will therefore require one of the parties (typically the contractor, architect or professional) to defend, indemnify, and hold harmless the other (typically the owner) with regard to specific claims (or potential claims).
Although most practitioners have some experience drafting and negotiating indemnity provisions, there are common misconceptions with regard to construction contract indemnities. For instance, many attorneys are surprised to learn that absent clear language to the contrary, an indemnitee is unable to recover the costs incurred to enforce the indemnification provision. Also, not all practitioners are aware that the indemnitee cannot be indemnified for its ordinary (as opposed to gross) negligence. Both of these issues have arisen recently in our practice and are worth discussing in some greater detail.
