Many, if not all, construction contracts contain provisions which require a contractor to indemnify the owner and/or the other contractors on the project from the damages arising out of an injury to a person or property due to the acts or omissions of the contractor. In the recent case of Blackshire v. Banfield, the court addressed the issue of whether the indemnification clause of a contract required a contractor to indemnify an owner whose negligence contributed to a personal injury.
In Blackshire, Southern Illinois Power Cooperative (“SIPC”) sought indemnity, including indemnity for SIPC’s own negligence, for damages arising from a serious injury to an employee of Keith Martin, Inc. (“Martin”) pursuant to Martin’s contract with SIPC for electrical work at a power station owned by SIPC. It was undisputed that SIPC’s own negligence contributed to the injury of the Martin employee.
The indemnity provision in Martin’s contract with SIPC provided as follows:
Contractor shall defend and indemnify and save Owner and all of Owner’s employees harmless from any and all claims, losses, damages, demands, suits, actions, payments, judgments, costs, and expenses, including attorneys’ fees, arising or alleged to arise from personal injuries, including death or damage to property, occurring during the performance of the work and due to the negligent acts or omissions of the Contractor.
SIPC argued that if it is determined that Martin was guilty of any negligence which proximately caused injury to the employee, no matter how small compared to the negligence of SIPC, Martin must completely indemnify SIPC. Martin argued that the language of the contract limited Martin’s indemnity obligations to a percentage equal to Martin’s own negligence and did not extend to include indemnification for SIPC’s own negligence.
In determining whether Martin would be required to indemnify SIPC, the court noted that in order for an indemnity provision to require the indemnification of the indemnitee’s own negligence, the provision must provide for such indemnification in clear and explicit language. If there is no clear and explicit language, no such indemnification will be found.
In applying these principles to the indemnification provision in the Blackshire case, the court ruled the provision in the Martin contract limited Martin’s indemnity to damages “due to the negligent acts or omissions of the Contractor.” Such language did not extend the indemnification to negligent acts or omissions of the Owner. Rather, the provision only required the contractor to be responsible for the damages attributable to its own negligence. Thus, Martin would not be required to indemnify SIPC for SIPC’s own negligence.
Indemnity provisions are material provisions of construction contracts. Contractors will seek to limit the scope of their indemnification to damages arising from personal injuries or damage to property arising from the negligent acts or omissions of the contractor. Owners may seek to expand the contractor’s indemnification to cover damages arising from personal injuries or damage to property arising from the negligent acts or omissions of any party on the job site since it is the contractor’s responsibility to supervise the project, including safety procedures. Thus, it is important that both the contractor and the owner review indemnity provisions carefully to ensure that they have agreed upon the scope of the indemnity to be provided.
If you have a question about an indemnity provision in a construction contract, please telephone a member of the firm.