Next time you sign a contract, look closely for language requiring either you or your client to “indemnify” and/or “hold harmless” from claims by third parties. This type of provision is commonly referred to as an indemnity provision. In general, it requires one party to reimburse the other for losses and/or damages incurred as a result of a claim against that other party. While many contracts contain such provisions, it is important to understand that state law often limits their reach and enforceability. Consequently, whether it is you or your client who has requested an indemnity provision, it is advisable that you check with your legal counsel to verify that the provision is valid under your state’s specific laws.
By Douglas R. Garmager, Esq.
Most professionals, including engineers, understand that claims are one of the inevitable costs of doing business. Engineers buy professional liability insurance to ensure that the cost of defense, settlement, and/or liability associated with a claim will not fall predominately on their shoulders.