HB409 Alabama 2022 Session

Summary

Primary Sponsor

Ben RobbinsRepresentative

Republican

Session

Regular Session 2022

Title

Construction contracts, indemnification provision for damages caused by another party, prohibited

Summary

HB409 would ban certain indemnification clauses in construction contracts for projects costing $50,000 or more, so one party cannot be required to defend or compensate another for damages caused by that other party's conduct.

What This Bill Does

If enacted, the bill prohibits a contract from requiring a party to indemnify or defend another for damages caused by that other party's own conduct when the project costs $50,000 or more. It allows indemnification only to the extent the indemnifying party's own negligence or misconduct causes the damages, and it restricts the use of additional insured coverage to match the indemnity. It also excludes certain relationships (like surety or insurer obligations) and clarifies that the rules apply only to the contract between the involved parties, not to third-party tort claims, with immediate effect after passage.

Who It Affects

• Private individuals or businesses entering construction contracts in Alabama with projects totaling $50,000 or more, who would no longer be able to shift liability for damages caused by another party's conduct through broad indemnity provisions.
• Contractors, subcontractors, and project owners who are parties to construction contracts, who must limit indemnity to their own negligence or misconduct and avoid broad defense or hold-harmless requirements for others' actions.
• Insurance and surety relationships are largely unaffected for their existing obligations (the act does not apply to indemnity obligations between principals and sureties or between insurers and insureds).

Key Provisions

• Prohibits a construction contract from requiring a party to indemnify, hold harmless, or defend another for damages caused by the negligence, wantonness, recklessness, or intentional misconduct of the indemnified party, when the project costs $50,000 or more.
• Defines construction contract and party with a $50,000+ threshold, applying to contracts, subcontracts, purchase orders, or related agreements for construction projects in the state.
• Contracts entered after the act’s effective date must not include such indemnity provisions; those provisions are void and unenforceable.
• Permits indemnity only to the extent caused by the negligence, wantonness, recklessness, or intentional conduct of the indemnifying party or its officers, employees, or agents.
• Prohibits requiring the indemnifying party to provide insurance as an additional insured for claims arising from the other party's own conduct or for conduct broader than the indemnity provided.
• Does not apply to indemnity obligations of a principal to its surety on a construction bond or to an insurer’s indemnity to its insured.
• Applies only to indemnity or insurance obligations between parties to a construction contract and does not affect third-party tort claims.
• Does not change Alabama’s joint and several liability doctrine or workers' compensation laws.
• Takes effect immediately after passage and approval by the Governor, or otherwise becomes law.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Contracts