Texas Anti-Indemnity Act
The Texas Anti-Indemnity Act is the commonly used name for statutory restrictions that limit certain indemnification, defense, hold-harmless, and additional-insured obligations in covered Texas construction contracts.
Definition
The Texas Anti-Indemnity Act commonly refers to the indemnification restrictions contained in Chapter 151, Subchapter C of the Texas Insurance Code. The statutory framework applies to specified construction contracts and renders certain contractual provisions void and unenforceable to the extent that they require one party, identified as the indemnitor, to indemnify, hold harmless, or defend another party for claims caused by the negligence, fault, statutory or regulatory violation, or breach of contract of the party receiving indemnity or specified persons under that party’s control or supervision.
The framework also limits contractual requirements and insurance provisions providing additional-insured coverage when the required scope of that coverage corresponds to an indemnification obligation prohibited by the statute. The restrictions operate as limitations on the transfer of specified liabilities rather than as a general prohibition against all contractual indemnity arrangements.
Structural Components
- Construction contract: The statutory restrictions are tied to qualifying agreements concerning construction projects within the scope of Texas Insurance Code Chapter 151.
- Indemnitor: The party contractually required to indemnify, defend, or hold another party harmless.
- Indemnitee: The party receiving the contractual indemnification, defense, or hold-harmless obligation.
- Prohibited liability transfer: Section 151.102 restricts provisions requiring an indemnitor to assume specified liability attributable to the indemnitee, its agents or employees, or certain third parties under its control or supervision.
- Additional-insured limitation: Section 151.104 extends the statutory restriction to certain contractual additional-insured requirements and insurance provisions to the extent their coverage scope corresponds to prohibited indemnity obligations.
- Employee-claim exception: Section 151.103 establishes a specific exception involving claims for bodily injury or death of an employee of the indemnitor, its agent, or a subcontractor of any tier.
- Statutory exclusions: Section 151.105 identifies categories of agreements, claims, protections, and projects that are not affected by the indemnification restrictions in Subchapter C.
- Nonwaiver: Section 151.151 provides that the requirements of Chapter 151 may not be waived by contract or otherwise.
Parameters & Conditions
Subchapter C applies to a construction contract for a construction project when the indemnitor is provided or procures insurance subject to Chapter 151 or Title 10 of the Texas Insurance Code. The applicability provision operates regardless of whether the relevant insurance is provided or procured before or after execution of the construction contract.
Under Section 151.102, a covered provision is void and unenforceable only to the extent that it requires indemnification, defense, or hold-harmless protection for a claim caused by specified conduct attributable to the indemnitee, its agent or employee, or certain third parties under the indemnitee’s control or supervision. The statutory restriction therefore concerns the scope and source of the transferred liability rather than the existence of indemnification language by itself.
Section 151.104 applies a corresponding limitation to provisions requiring the purchase of additional-insured coverage and to insurance endorsements or provisions providing such coverage when the coverage would extend to a liability transfer prohibited by Subchapter C. A limited exception applies to provisions or endorsements issued under a consolidated insurance program to the extent they list, add, or delete named insureds.
Topic Relationships
Exceptions, Limitations & Boundaries
The Texas Anti-Indemnity Act does not invalidate every indemnity provision associated with construction. Section 151.102 applies only within its statutory scope and only to the extent a provision transfers the categories of liability identified by the statute.
Section 151.103 provides that the Section 151.102 restriction does not apply to a construction-contract provision requiring indemnification, defense, or hold-harmless protection against a claim for bodily injury or death of an employee of the indemnitor, its agent, or its subcontractor of any tier.
Section 151.105 further provides that Subchapter C does not affect specified matters, including certain insurance policies subject to the additional-insured restriction in Section 151.104, independent breach-of-contract or warranty causes of action, specified loan and financing indemnities, general indemnity agreements required by sureties, workers’ compensation protections, governmental immunity protections, agreements governed by Chapter 127 of the Texas Civil Practice and Remedies Code, specified railroad license agreements, copyright-infringement indemnity provisions, certain residential construction and related land-development indemnities, municipal public-works indemnities, and joint-defense agreements entered after a claim is made.
An exclusion from Subchapter C does not itself establish that a particular indemnification obligation is enforceable under every other applicable rule of Texas law; it identifies a boundary of this statutory framework.