Alabama 2022 Regular Session

Alabama House Bill HB409 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1 HB409
2	2	2 216260-2
3	3	3 By Representative Robbins
4	4	4 RFD: Commerce and Small Business
5	5	5 First Read: 24-FEB-22
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7	7	Page 0 1 216260-2:n:01/12/2022:FC/ma LSA2022-112R1
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14	14	8 SYNOPSIS: This bill would prohibit a construction
15	15	9 contract from containing a provision requiring a
16	16	10 party to defend or indemnify another party for
17	17	11 damages caused by the conduct of the other party
18	18	12 when the total costs of the undertaking is fifty
19	19	13 thousand dollars ($50,000) or more.
20	20	14
21	21	15 A BILL
22	22	16 TO BE ENTITLED
23	23	17 AN ACT
24	24	18
25	25	19 Relating to construction contracts; to prohibit
26	26	20 certain indemnification provisions in construction contracts
27	27	21 under certain conditions that require a party to defend or
28	28	22 indemnify or insure a second party for damages caused by the
29	29	23 conduct of the second party.
30	30	24 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
31	31	25 Section 1. The Legislature finds that it is in the
32	32	26 best interests of this state and its residents to ensure that
33	33	27 any private business or individual entering into a
34	34	Page 1 1 construction contract is financially responsible under the
35	35	2 state's tort liability system for damages that the private
36	36	3 party may cause while performing under the contract. It is the
37	37	4 intent of this act to promote competition and safety relating
38	38	5 to construction contracts by requiring an indemnifying party
39	39	6 to be responsible for any and all damages, losses, or
40	40	7 injuries, including, but not limited to, attorney's fees and
41	41	8 other litigation costs, caused by that party and by
42	42	9 prohibiting the shifting of that responsibility to another
43	43	10 party.
44	44	11 Section 2. As used in this act, the following words
45	45	12 have the following meanings:
46	46	13 (1) CONSTRUCTION CONTRACT. A contract, subcontract,
47	47	14 sub-subcontract, purchase order, or other agreement for the
48	48	15 planning, management, construction, supply, repair,
49	49	16 reconstruction, replacement, rehabilitation, or improvement of
50	50	17 any private or public construction project in the state when
51	51	18 the total costs of the undertaking is fifty thousand dollars
52	52	19 ($50,000) or more.
53	53	20 (2) PARTY. An individual or private business that is
54	54	21 a party to a contract involved in or contributing to the
55	55	22 construction of a private or public construction project.
56	56	23 Section 3. A construction contract may not require a
57	57	24 party to the contract to indemnify, hold harmless, or defend
58	58	25 another party for liability, damages, losses, or costs caused
59	59	26 by the negligence, wantonness, recklessness, or intentional
60	60	27 misconduct of the party to be indemnified or its officers,
61	61	Page 2 1 employees, or agents. Any such requirement contained in a
62	62	2 contract entered into after the effective date of this act is
63	63	3 void and unenforceable.
64	64	4 Section 4. A construction contract may contain a
65	65	5 provision requiring a party to the contract to indemnify, hold
66	66	6 harmless, or defend another party, but only to the extent that
67	67	7 liability, damages, losses, or costs are caused by the
68	68	8 negligence, wantonness, recklessness, or intentional conduct
69	69	9 of the indemnifying party or the indemnifying party's
70	70	10 officers, employees, or agents.
71	71	11 Section 5. A construction contract may not require a
72	72	12 party to the contract to provide insurance coverage to another
73	73	13 party as an additional insured for claims that arise out of or
74	74	14 are caused by the second party's own negligent, reckless,
75	75	15 wanton, or intentional conduct or that of its officers,
76	76	16 employees, or agents. Any additional insured coverage required
77	77	17 under a construction contract may not be broader than the
78	78	18 scope of indemnity provided in Section 3 or Section 4.
79	79	19 Section 6. This act does not apply to the indemnity
80	80	20 obligation of a principal to its surety on a construction bond
81	81	21 or to the indemnity obligation of an insurer to its insured.
82	82	22 Section 7. This act only applies to indemnity or
83	83	23 insurance obligations between parties to a construction
84	84	24 contract and has no effect on third-party tort claims.
85	85	25 Section 8. Any provision of law to the contrary
86	86	26 notwithstanding, this act shall not be interpreted or
87	87	Page 3 1 construed to affect the state's doctrine of joint and several
88	88	2 liability or the state workers' compensation laws.
89	89	3 Section 9. This act shall become effective
90	90	4 immediately following its passage and approval by the
91	91	5 Governor, or its otherwise becoming law.
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