California Anti-Indemnity Statutes and Contractual Additional Insured Requirements


Contractual agreements between owners and general contractors and/or between general contractors and subcontractors routinely include “indemnity” and/or “additional insured” provisions. Indemnity provisions typically require one party (typically the subcontractor or general contractor, or the “indemnitor”) to indemnify the other (typically the general contractor and/or owner, or the “indemnitee”) for any losses or claims arising out of the indemnitor’s actions. “Additional insured” provisions typically require one party to purchase insurance naming a contractor, owner or others as an insured party on the Commercial General Liability policy. These provisions are typically disfavored by subcontractors because these provisions shift financial responsibility to the subcontractor even when the subcontractor may not be at fault for the loss. Moreover, subcontractors have argued that indemnitees may not have the incentive to exercise care to avoid losses because the indemnified party is not responsible for its own actions.

Based upon these concerns, along with the idea that subcontractors may not have equal bargaining power in their negotiations with general contractors, most state legislatures have enacted statutes limiting the scope of legal liability that one party may contractually transfer to another. These statutes, also known as “antiindemnity statutes,” work differently depending on the specific language in each state statute. For example, most state statutes forbid indemnification when the negligence alleged arises from the indemnitee’s sole negligence. On the other hand, many antiindemnification statutes allow indemnitees to contractually assign their liability to indemnitors if the indemnitees are only partially responsible for the loss. This subtle but substantial difference in statutory language can result in significant difference regarding who pays the loss under contractual indemnification clauses.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Snell & Wilmer | Attorney Advertising

Written by:


Snell & Wilmer on:

Popular Topics
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.