{"id":895735,"date":"2019-04-16T12:11:51","date_gmt":"2019-04-16T18:11:51","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=895735"},"modified":"2019-04-16T12:11:54","modified_gmt":"2019-04-16T18:11:54","slug":"interpreting-scope-colorado-anti-indemnity-statute","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/interpreting-scope-colorado-anti-indemnity-statute\/","title":{"rendered":"Interpreting the Scope of Colorado’s Anti-Indemnity Statute"},"content":{"rendered":"\n

Rachel Burkhart | Faegre Baker Daniels<\/a> | April 12, 2019<\/p>\n\n\n\n

A common feature of construction contracts is the indemnity or \u201chold harmless\u201d provision, which transfers the risk of loss due to a third-party claim from one party to another. Several states have enacted laws that limit the enforcement of indemnity provisions in construction contracts. Colorado\u2019s anti-indemnity statute, enacted in 2007, is relatively broad compared to other states\u2019 statutes. Before assuming that the Colorado anti-indemnity statute applies to your contract, however, you should consider some of its key provisions.<\/p>\n\n\n\n

Forms of Indemnity Prohibited in Colorado<\/h2>\n\n\n\n

Anti-indemnity statutes can be categorized based on the types of indemnity provisions that they target. Although indemnity provisions vary from contract to contract, they typically fall within one of three categories. The first type is the \u201cfault-free\u201d provision, which requires indemnification so long as the indemnitor\u2019s mere work or presence is involved, or where the loss arises out of the indemnitee\u2019s sole fault. The second category includes provisions that require indemnification where the negligence or fault of the indemnitor was a partial cause of the loss, even though the loss may also have been due in part to the indemnitee. The third category of indemnity provisions requires indemnification only where the loss is due entirely to the indemnitor\u2019s negligence.<\/p>\n\n\n\n

In Colorado, the anti-indemnity statute addresses the first and second categories of indemnity provisions. Under the anti-indemnity statute, an indemnitor can only be held responsible for damages caused by the fault or negligence of the indemnitor and its subcontractors, suppliers and agents. The extent of an indemnitor\u2019s liability is limited to the degree or percentage of its own negligence or fault. Colorado\u2019s anti-indemnity statute prohibits indemnity provisions that require an indemnitor to pay for damages caused by the indemnitee\u2019s own fault or negligence, or that of its agents. Such provisions are void as against public policy and not enforceable.<\/p>\n\n\n\n

Limitations on the Scope of Colorado\u2019s Anti-Indemnity Statute<\/h2>\n\n\n\n

In many respects, Colorado\u2019s anti-indemnity statute is quite broad. For example, the statute addresses \u201cconstruction businesses\u201d as a whole and does not distinguish between indemnification of owners, designers, contractors, subcontractors and their agents. Colorado\u2019s statute is also unusual in that it prohibits provisions that require the indemnitor to obtain insurance coverage for losses caused by an indemnitee\u2019s own fault or negligence.<\/p>\n\n\n\n

However, before you assume that these broad prohibitions apply to your contract, you should consider whether it falls under one of the statute\u2019s exceptions.<\/p>\n\n\n\n

For instance, Colorado defines a \u201cconstruction agreement\u201d as almost any and every contract in the construction industry, including design contracts. But some courts have still found categories of agreements that fall outside the definition, such as operation agreements and master services agreements. The statute also expressly exempts agreements affecting property owned by railroads, sanitation districts and water districts, as well as lease agreements between landlords and tenants.<\/p>\n\n\n\n

Colorado\u2019s anti-indemnity statute is also limited to \u201cliability for damage arising out of death or bodily injury to persons or damage to property caused by the negligence or fault of the indemnitee or any third party under the control or supervision of the indemnitee.\u201d Theoretically, certain categories of damage \u2014 such as emotional distress \u2014 may escape the prohibition. Indemnification may also be upheld when reimbursement of expenses is sought for a claim that has not yet reached final adjudication or settlement, which is when liability typically attaches. It is also unclear whether the statute applies to indemnification for third party claims based on a theory of strict liability where fault is not an element of the claim.<\/p>\n\n\n\n

Overall, Colorado\u2019s anti-indemnity statute contains a relatively broad prohibition against indemnification for indemnitee-caused losses, but some construction contracts may still fall outside its scope, depending on the circumstances.<\/p>\n","protected":false},"excerpt":{"rendered":"

Rachel Burkhart | Faegre Baker Daniels | April 12, 2019 A common feature of construction contracts is the indemnity or \u201chold harmless\u201d provision, which transfers the risk of loss due to a third-party claim from one party to another. Several states have enacted laws that limit the enforcement of indemnity provisions in construction contracts. Colorado\u2019s… Continue reading Interpreting the Scope of Colorado’s Anti-Indemnity Statute<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,120,224,8881],"class_list":["post-895735","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-colorado","tag-construction-contract","tag-indemnity","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nInterpreting the Scope of Colorado's Anti-Indemnity Statute - 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