The Colorado anti-indemnity statute significantly affects the enforceability of indemnification provisions in Colorado construction contracts. With some limited exceptions, construction contracts imposing broad indemnity obligations—i.e., obligations requiring a party to a construction agreements to cover losses associated with another party’s own negligence—are void.
Colorado’s anti-indemnity statute does not apply to property owned or operated by railroads or public districts; nor does it apply to rental agreements. However, for virtually all other types of construction contracts entered into after July 1, 2007, “any provision in a construction agreement that requires a person to indemnify, insure, or defend in litigation another person against liability for damage . . . caused by the negligence or fault of the indemnitee . . . is void.”
Colorado statues do provide for allocation of liability between tortfeasors, which some trial courts will follow even in the case of a breach of contract claim. As such, a party can be indemnified to the extent some other party was found to be the cause of a plaintiff’s damages. But, as noted, only in very rare circumstances can a party to a construction contract be indemnified for its own negligence.
It does bear noting, however, that this statutory provision does not invalidate contract clauses that require a party to purchase insurance and to name the other party as an additional insured. As such, given the broad restrictions on contract provisions that indemnify a party for its own negligence, it is important that parties address insurance requirements in their contracts.
Finally, parties cannot avoid Colorado’s broad anti-indemnity statute by selecting a different choice of law in their contracts. Under C.R.S. § 13-21-111.5(g), “[n]otwithstanding any contractual provision to the contrary, the laws of the state of Colorado shall apply to every construction agreement affecting improvements to real property within the state of Colorado.”