The combination of these two subsections makes it clear, however, that in government construction contracting, any attempt to require a party to the contract to indemnify the other party for the indemnitee
's own negligence is void as against public policy.
Fischer Sand & Aggregate Inc., it held that in order for a contractual indemnity clause to obligate an indemnitor in this case, Tower Tap -- to indemnify an indemnitee
-- London Road -- for the indemnitee
's own negligence, the indemnity clause must use express language that unequivocally shows the parties' intent to transfer liability to the indemnitor.
Tort liability means a liability that would be imposed by law in the absence of the contract or agreement." The most important aspect of contractual liability coverage is whether the party seeking indemnity (the "indemnitee
") has contractually required the other party (the "indemnitor") to "assume the tort liability" of the indemnitee
to pay for bodily injury or property damage to a third party; if not, no contractual liability coverage is afforded.
Contrarily, IIAA asserts that the current, unrevised CGL policy "implicitly" provides the indemnitee
with defense and defense costs for fighting a tort claim in court.
The indemnitor or party obligated to cover the environmental liability can purchase a bond or other mechanism to protect the indemnitee
in the event of a default by the indemnitor.
(In the case of an indemnity, reimbursement, or similar arrangement, the partner or related person must be liable up to the fill amount of its obligation to the extent the indemnitee
makes a payment to satisfy the liability.) These rules would prevent situations such as "bottom-dollar guarantees" and similar arrangements and would adopt anti-abuse rules where "financial intermediaries" or other persons are used to create senior and subdebt tantamount to a bottom-dollar guarantee situation.
The court reasoned that the defendant deserved the grant because the insurer's claim was barred by the statute of limitations, which began to accrue when the indemnitee
suffered a loss through payment of settlement.
The Restatement (Third) of Torts provides this type of upstream indemnity where the seller "was not liable except as a seller of a product supplied to the indemnitee
[seller] by the indemnitor [producer/manufacturer] and the indemnitee
was not independently culpable." (22)
The first type, broad form indemnity, is where one party, ("indemnitor") indemnifies the other party ("indemnitee
") for claims, even when the indemnitee
is solely at fault.
When making a contractual transfer, it's important to make sure that the person assuming the risk has the resources to pay for the loss, however; the contract might indemnify you, but the indemnitee
needs to have the wherewithal to assume the risk and the financial resources to pay for the loss."
The reason is that contractual indemnification provisions often do not impose upon the indemnitor (at least not clearly and effectively) the obligation to immediately defend or fund an indemnitee
's defense when allegations trigger an indemnitor's obligations.