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California Governor Signs SB 496 Amending California’s Anti-Indemnity Statute

The bill amends Cal. Civ. Code § 2782.8 as it applies to indemnity agreements with design professionals. The pre-existing § 2782.8 prohibited public agencies from requiring indemnity from design professionals for anything other than claims arising out of, pertaining to, or relating to the negligence, recklessness, or willful misconduct of the design professional.

Under the newly passed bill, the indemnity restrictions imposed on public agencies when contracting with design professionals will now apply to all parties contracting with design professionals for professional services (effective Jan. 1, 2018).  These restrictions also apply to a party contractually imposing a defense obligation on the design professional.

The revised statute specifically identifies architects, landscape architects, professional engineers, and professional land surveyors as included within the meaning of “design professional,” however it is unclear whether that is the extent of the phrase’s meaning.

Those portions of the revised statute addressing the duty and cost to defend will not apply to:

(1)  Any contract for design professional services, or amendments thereto, where a project-specific general liability policy insures all project participants for general liability exposures on a primary basis and also covers all design professionals for their legal liability arising out of their professional services on a primary basis.

(2)  A design professional who is a party to a written design-build joint venture agreement.

This bill represents the most recent change to California’s constantly evolving complex anti-indemnity statute. Policyholders entering into construction contracts in California should carefully review their indemnity provisions to ensure full compliance with California’s statutory requirements.

May 17, 2017
William S. Bennett

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