On June 17, 2011, Texas Governor Rick Perry signed HB 2093, anti-indemnity and anti-additional insured legislation that constitutes significant changes for the construction industry. HB 2093 prohibits and voids broad form and intermediate form indemnity agreements (claims involving the sole or concurrent negligence of the indemnitees) for construction projects in Texas. It also prohibits and voids construction contract provisions requiring additional insured coverage for the same types of conduct no longer indemnifiable under the legislation. This means that owners and general contractors can no longer require subcontractors to (1) indemnify them for the owner or general contractor’s own negligence or concurrent negligence, or (2) provide additional insured coverage for the owner or general contractor’s own negligence or concurrent negligence.
The bill does contain two notable exceptions: (1) it does not apply to indemnification claims for “the bodily injury or death of an employee of the indemnitor, its agent, or its subcontractor of any tier”; and (2) it specifically excepts contracts for residential and public works projects.
With this legislation, Texas joins only a handful of states that prohibit both indemnity and additional insured status in construction contracts. The Texas legislation applies to contracts entered into on or after January 1, 2012. Owners and contractors should evaluate and revise their construction contracts and insurance programs as impacted by this legislation. A copy of the full text of the bill as signed by Governor Perry is available here.