EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0161*
SENATE BILL 161
D3 2lr0771
SB 189/21 – JPR (PRE–FILED) CF HB 79
By: Senator West
Requested: October 15, 2021
Introduced and read first time: January 12, 2022
Assigned to: Judicial Proceedings
A BILL ENTITLED
AN ACT concerning 1
Courts – Prohibited Indemnity and Defense Liability Agreements 2
FOR the purpose of prohibiting a provision in a contract with a design professional for 3
professional services that requires the design professional to indemnify or hold 4
harmless certain parties unless the design professional is at fault for causing the 5
loss, damage, or expense indemnified; prohibiting a provision in a contract with a 6
design professional for professional services that requires the design professional to 7
defend certain parties against liability or certain claims; and generally relating to 8
indemnity and defense liability agreements. 9
BY repealing and reenacting, with amendments, 10
Article – Courts and Judicial Proceedings 11
Section 5–401(a) 12
Annotated Code of Maryland 13
(2020 Replacement Volume and 2021 Supplement) 14
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
That the Laws of Maryland read as follows: 16
Article – Courts and Judicial Proceedings 17
5–401. 18
(a) (1) (I) IN THIS SUBSECTION TH E FOLLOWING WORDS HA VE THE 19
MEANINGS INDICATED . 20
(II) “DEFEND” MEANS TO PAY FOR DEF ENSE COSTS OR TO 21
FURNISH COUNSEL AT T HE EXPENSE OF THE PR OMISOR FOR THE PURPO SE OF 22
DEFENDING A PROMISEE OR THE PROMISEE ’S INDEPENDENT CONTRA CTORS, 23 2 SENATE BILL 161
AGENTS, EMPLOYEES, OR INDEMNITEES AGAIN ST CLAIMS ALLEGED OR BROUGHT 1
AGAINST THE PROMISEE OR THE PROMISEE ’S INDEPENDENT CONTRA CTORS, 2
AGENTS, EMPLOYEES, OR INDEMNITEES BY A THIRD PARTY IN ANY C OURT OR OTHER 3
TRIBUNAL, INCLUDING FORM S OF ALTERNATIVE DIS PUTE RESOLUTION REQU IRED 4
BY LAW OR CONTRACT , BEFORE THE COURT OR TRIBUNAL HAS REACHED A FINAL 5
DETERMINATION OF FAU LT. 6
(III) “DEFENSE COSTS ” MEANS REASONABLE FEE S OF 7
ATTORNEYS AND EXPERT WITNESSES, COURT COSTS , AND RELATED EXPENSES 8
ACTUALLY INCURRED BY A PARTY IN THE DEFEN SE OF A CLAIM OR AN ALLEGATION 9
OF LIABILITY IN CONN ECTION WITH LITIGATI ON, ARBITRATION, OR ALTERNATIVE 10
DISPUTE RESOLUTION PROCEE DINGS. 11
(IV) “DERIVATIVE PARTIES ” MEANS A PARTY ’S 12
SUBCONTRACTORS , AGENTS, EMPLOYEES, OR OTHER PERSONS FOR WHICH THE 13
PARTY MAY BE LIABLE OR RESPONSIBLE AS A RESULT OF ANY STATUT ORY, TORT, OR 14
CONTRACTUAL DUTY . 15
(V) “DESIGN PROFESS IONAL” MEANS: 16
1. A LICENSED ARCHITECT , AS DEFINED IN § 3–101 OF 17
THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; 18
2. A CERTIFIED INTERIOR D ESIGNER, AS DEFINED IN § 19
8–101 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; 20
3. A LICENSED LANDSCAPE A RCHITECT, AS DEFINED IN 21
§ 9–101 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; 22
4. A PROFESSIONAL ENGINEE R, AS DEFINED IN § 14–101 23
OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; OR 24
5. A PROFESSIONAL LAND SU RVEYOR, AS DEFINED IN § 25
15–101 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE. 26
(VI) “FAULT” MEANS: 27
1. A BREACH OF CONTRACT ; 28
2. A NEGLIGENT, RECKLESS, OR INTENTIONAL ACT O R 29
OMISSION CONSTITUTIN G A TORT; OR 30
3. A VIOLATION OF APPLICA BLE STATUTES OR 31 SENATE BILL 161 3
REGULATIONS . 1
(VII) “PROFESSIONAL SERVICES ” MEANS SERVICES OR WO RK 2
THAT CONSTITUTE S THE PRACTICE OF A PR OFESSION REGULATED B Y, OR FOR 3
WHICH LICENSURE IS R EQUIRED UNDER , TITLE 3, TITLE 8, TITLE 9, TITLE 14, OR 4
TITLE 15 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE. 5
(2) A PROVISION, covenant, promise, agreement, or understanding in, or 6
in connection with or collateral to, a contract or agreement relating to architectural, 7
engineering, inspecting, or surveying services, or the construction, alteration, repair, or 8
maintenance of a building, structure, HIGHWAY, ROAD, appurtenance or appliance, 9
including moving, demolition, and excavating connected with those services or that work, 10
purporting to indemnify the promisee against liability for damages arising out of bodily 11
injury to any person or damage to property caused by or resulting from the sole negligence 12
of the promisee or indemnitee, or the agents or employees of the promisee or indemnitee, is 13
against public policy and is void and unenforceable. 14
[(2)] (3) A PROVISION, A covenant, a promise, an agreement, or an 15
understanding in, or in connection with or collateral to, a contract or an agreement relating 16
to architectural, engineering, inspecting, or surveying services, or the construction, 17
alteration, repair, or maintenance of a building, a structure, A HIGHWAY, A ROAD, an 18
appurtenance, or an appliance, including moving, demolition, and excavating connected 19
with those services or that work, purporting to require the promisor or indemnitor to defend 20
or pay the costs of defending the promisee or indemnitee against liability for damages 21
arising out of bodily injury to any person or damage to property caused by or resulting from 22
the sole negligence of the promisee or indemnitee, or the agents or employees of the 23
promisee or indemnitee, is against public policy and is void and unenforceable. 24
(4) A PROVISION IN, OR IN CONNECTION WIT H A CONTRACT OR AN 25
AGREEMENT WITH A DES IGN PROFESSIONAL FOR PROFESSIONAL SERVICE S 26
PURPORTING TO REQUIR E THE DESIGN PROFESSIONAL TO INDEMNIFY OR HOLD 27
HARMLESS THE PROMISE E, THE PROMISEE ’S INDEPENDENT CONTRA CTORS, 28
AGENTS, EMPLOYEES, OR INDEMNITEES , OR ANY OTHER PERSON AGAINST LOSS, 29
DAMAGES, OR EXPENSES IS VOID AND UNENFORCEABLE UN LESS THE FAULT OF TH E 30
DESIGN PROFESSI ONAL OR ITS DERIVATI VE PARTIES IS THE PR OXIMATE CAUSE OF 31
THE LOSS, DAMAGE, OR EXPENSE INDEMNIFI ED. 32
(5) A PROVISION IN, OR IN CONNECTION WIT H A CONTRACT OR AN 33
AGREEMENT WITH A DES IGN PROFESSIONAL FOR PROFESSIONAL SERVICE S 34
PURPORTING TO REQUIR E THE DESIG N PROFESSIONAL TO DE FEND A PROMISEE , 35
THE PROMISEE ’S INDEPENDENT CONTRA CTORS, AGENTS, EMPLOYEES, OR 36
INDEMNITIE ES, OR ANY OTHER PERSON AGAINST LIABILITY OR CLAIMS FOR 37
DAMAGES OR EXPENSES , INCLUDING ATTORNEY ’S FEES, ALLEGED TO BE CAUSED , IN 38
WHOLE OR IN PART , BY THE PROFESSIONAL NEGLIGENCE OF THE DE SIGN 39
PROFESSIONAL OR ITS DERIVATIVE PARTIES , WHETHER THE CLAIM IS ALLEGED OR 40 4 SENATE BILL 161
BROUGHT IN TORT OR C ONTRACT, IS AGAINST PUBLIC PO LICY AND IS VOID AND 1
UNENFORCEABLE . 2
(6) THIS SUBSECTION MAY N OT BE INTERPRETED TO PROHIBIT AN 3
OTHERWISE ENFORCEABL E INDEMNITY OR HOLD HARMLESS PROVISION I N ANY 4
CONTRACT OR AGREEMEN T FROM INCLUDING REC OVERY OF REASONABLE 5
ATTORNEY’S FEES AND DEFENSE C OSTS ACTUALLY INCURR ED BY THE PROMISEE T O 6
DEFEND AGAINST THIRD –PARTY CLAIMS FOR DAM AGES, LOSSES, OR EXPENSES , 7
ALLEGED IN ANY COURT , TRIBUNAL, OR ALTERNATIVE DISPU TE RESOLUTION 8
PROCEDURE REQUIRED O F THE PROMISEE BY LA W OR BY CONTRACT , IN CASES 9
WHERE THE FAULT OF T HE PROMISOR OR ITS D ERIVATIVE PARTIES IS DETERMINED 10
TO BE THE PROXIMATE CAUSE OF THE D EFENSE COSTS TO BE I NDEMNIFIED. 11
[(3)] (7) This subsection does not affect the validity of any insurance 12
contract, workers’ compensation, any general indemnity agreement required by a surety as 13
a condition of execution of a bond for a construction or other contract, or any other 14
agreement issued by an insurer. 15
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 16
October 1, 2022. 17