Requires contracts between professional design firms and municipal corporations, state and local authorities, or state departments contain language concerning indemnification

3 Co-sponsors

• George D. Maziarz
• James L. Seward
• David J. Valesky

BILL NUMBER:S5038A

Title of bill

An act to amend the general municipal law, the public authorities law and the state finance law in relation to contracts with professional design firms

Purpose

To make indemnification language in contracts with public entities standard throughout the state and to prevent design professionals from indemnifying clients for damages that fall outside their professional standard of care.

Summary of provisions

Section 1 amends article 5A of the general municipal law by adding a new section 103-h.

Section 2 amends title 4 of article 9 of the public authorities law by adding a new section 2879d.

Section 3 amends section 136-a of the state finance law by adding a new subdivision 6.

Section 4 sets the effective date.

Justification

Indemnification is an agreement between two parties for one party to assume liability in the event of a loss. A consultant may at times indemnify a client and assume some of the client's legal liabilities and thereby acts as an insurer for the client. Some public clients in New York State have been asking consultants to indemnify them for things that cannot be insured. If a consultant signs an indemnity that is not limited to just consultant's negligence they are accepting liability beyond that required by law and beyond that for which they are insured.

Professional liability insurance covers consultants against damages resulting from negligent professional acts, errors or omissions. To prove negligence, a claimant must establish the consultants' duty to adhere to standard of care, and establish their failure to do so and then prove that this failure proximately resulted in injury or damage to the claimant.

This legislation will make indemnity language standard throughout New York State fox public entities. Professional firms will indemnify and hold clients harmless from all third party claims, liabilities, damages and costs arising cut of negligent acts, errors and omissions for whom the design consultant is legally liable.

Legislative history

This is a new bill.

Fiscal implications

None to the state.

Effective date

This act shall take effect immediately.