HB409 Alabama 2020 Session

This bill would prohibit a public works contract or subcontract for roads and bridges from containing a provision requiring a party to indemnify another entity for damages caused by the conduct of the other party

Relating to public works contracts for roads and bridges; to prohibit certain indemnification provisions in the contracts requiring a party to indemnify another party for damages caused by the conduct of the other party.

Section 1

(a) The Legislature finds that it is in the best interests of this state and its residents to ensure that any business or individual entering into a contract for a public works project for roads or bridges is financially responsible under the tort liability system for damages that the business or individual may cause in performing under the contract. It is the intent of this act to promote competition and safety relating to public works contracts for roads or bridges by requiring a contracting party to be responsible for any and all damages, losses, or injuries, including, but not limited to, attorney's fees and other litigation costs, caused by the contracting party.

Section 2

As used in this act, "public works contract for roads and bridges" means a contract or a subcontract for the planning, acquisition, construction, repair, reconstruction, replacement, rehabilitation, or improvement of any road or bridge and financed in whole or in part by state, county, municipal, or federal funds.

Section 3

A public works contract for roads and bridges may not require a party to the contract to indemnify, hold harmless, or defend another party for liability, damages, losses, or costs caused by the negligence, wantonness, recklessness, or intentional misconduct of the party to be indemnified or its officers, employees, or agents. Any contact entered into after the effective date of this act containing such a requirement is void.

Section 4

A public works contract for roads and bridges may contain a provision requiring a party to the contract to indemnify, hold harmless, or defend another party, but only to the extent that liability, damages, losses, or costs are caused by the negligence, wantonness, recklessness, or intentional conduct of the indemnifying party or the indemnifying party's officers, employees, or agents.

Section 5

A public works contract for roads and bridges may not require a party to the contract to provide insurance coverage to another party as an additional insured for claims that arise out of or are caused by the second party's own negligent, reckless, wanton, or intentional conduct or that of its officers, employees, or agents. Any additional insured coverage required under a contract may not be broader than the scope of indemnity allowed under Sections nd 4 of this act.

Section 6

This act does not apply to indemnity of a surety by a principal on a construction contract bond or to indemnity of an insurer's obligations to its insureds.

Section 7

This act only applies to indemnity contracts between private parties to public works projects for roads or bridges and has no effect on third-party tort claims.

Section 8

This act does not affect contractual obligations owed by any contracting party to the Department of Transportation or any other awarding entity.

Section 9

Any provision of law to the contrary notwithstanding, this act may not be interpreted or construed to affect joint and several liability or workers' compensation laws. Section 10. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.