Risk Management for Architects and Engineers Part 4: Indemnification Provisions

Risk Management for Architects and Engineers Part 4: Indemnification Provisions

Virtually all professional services agreements contain an indemnification provision. On July 28, 2015, I had the pleasure of speaking to the Alabama Section of the American Society of Civil Engineers in Orange Beach, AL about indemnification as part of my risk management seminar. This post is designed to highlight some of the seminar discussion points with respect to indemnification.

Indemnification provisions come in various forms – very narrow to very broad. Consider the following very generic provisions:

“Design professional agrees to indemnify and save Client harmless from and against any and all claims which Client may incur, become responsible for, or pay out, but only to the extent caused by design professional’s acts or omissions.

Under this provision, the design professional’s indemnification obligations only extend to those damages caused by the design professional’s acts or omissions. But consider the following, shorter, but much broader, provision:

“Design professional agrees to indemnify and save client harmless for and against any and all claims which Client may incur, become responsible for, or pay out, except those caused solely by the Client.

Under this provision, the design professional’s indemnification obligations extend to all damages, except those caused solely by the client. Thus, under this provision, the client could seek indemnification from the design professional for damages incurred due to an act or omission wholly unrelated to the design professional (e.g., a contractor’s act or omission). Finally, consider this even shorter, yet much broader, provision:

“Design professional agrees to indemnify and save client harmless for and against any and all claims which Client may incur, become responsible for, or pay out during the course of the Project.”

Under this last provision, the design professional has assumed an indemnification duty for any damages incurred by the client on that particular project, even those caused by the client. This provision and the second provision could potentially have dire consequences for the design professional, even if he/she is not at fault, particularly in the event of a severe injury or catastrophe. Generic as these provisions may be (and these are likely much more generic than what you will see in a typical professional services agreement), hopefully they shed some light onto the varying scope of indemnification provisions. In sum, be sure to give due thought to, and read very closely, every indemnification provision that comes across your desk.

In a later post, I will discuss indemnification in more detail, including indemnification in light of the typical professional liability policy.

Alabama attorney and professional engineer Jacob W. Hill practices construction law, representing general contractors, subcontractors, material suppliers, developers, architects, engineers, and other parties to construction and development projects. Contact Jacob Hill for more information or a consultation regarding your project.

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