What's happening
This bill amends New York law to void construction contract indemnification clauses unless damages are not caused by the promisor or its agents.
Why it matters
Limits Risk Transfer in Construction Contracts. The bill restricts how much liability one party can shift to another in construction contracts, ensuring a company can't force another party to cover damages unless those damages were not caused by the party being asked to indemnify (the "promisor") or its agents (including employees, subcontractors, or vendors).
Promotes Fair Accountability. By voiding clauses that make a company responsible for damages it did not cause, the bill aims to prevent unfair situations where contractors or subcontractors are held liable for the negligence or fault of others, fostering a more equitable distribution of risk.
Could Affect Insurance and Project Costs. This change may influence how parties approach insurance and risk management on construction projects, potentially lowering costs for contractors and subcontractors who previously had to insure against liabilities over which they had no control.
Clarifies Legal Standards in Contract Disputes. By tightening the language around indemnification, the bill could reduce litigation over ambiguous contract terms and provide clearer guidance for courts, contractors, and project owners about who is responsible when accidents or damages occur.
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Who cares
Headline styles
Ban Unfair Construction Indemnity
Plain English, a few words. Used as the page title.
Sponsors
7 Co-sponsors
1 Multi-sponsor
History
- Referred to judiciary
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ban Construction Indemnity Clauses
In Senate Committee · Judiciary · Sponsor John A. DeFrancisco
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5330
2017-2018 Regular Sessions
IN ASSEMBLY
February 8, 2017
Introduced by M. of A. CUSICK, ABINANTI -- read once and referred to the Committee on Judiciary
AN ACT to amend the general obligations law, in relation to indemnification agreements relating to construction projects
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 5-322.1 of the general obligations law, as amended by chapter 67 of the laws of 1993, is amended to read as follows:
1. A covenant, promise, agreement or understanding in, or in connection with or collateral to a contract or agreement relative to the construction, alteration, repair or maintenance of a building, structure, appurtenances and appliances including moving, demolition and excavating connected therewith, purporting to indemnify or hold harmless the promisee against liability for damage arising out of bodily injury to persons or damage to property not contributed to, caused by or resulting from the negligence or other culpable act of the [promisee, his] promisor, its agents [or], employees, subcontractors or [indemnitee, whether such negligence be in whole or in part,] vendors is against public policy and is void and unenforceable; provided that this section shall not affect the validity of any insurance contract, workers' compensation agreement or other agreement issued by an admitted insurer. [This subdivision shall not preclude a promisee requiring indemnification for damages arising out of bodily injury to persons or damage to property caused by or resulting from the negligence of a party other than the promisee, whether or not the promisor is partially negligent.]
§ 2. This act shall take effect on the thirtieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00256-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.