The Massachusetts Supreme Judicial Court recently held that G.L. c. 186 §15, which makes void any indemnification agreement or provision whereby a tenant is obligated to indemnify a landlord, in whole or in part, for the landlord’s own negligence, does not apply to insurance provisions in the lease agreement. Norfolk & Dedham Mutual Fire Insurance Company v. Morrison, et al., No. 456 Mass. 463 (2010). Click here for a copy of the Supreme Judicial Court’s Opinion.
The underlying claim in Morrison was brought by the patient of a tenant at a commercial office space. The patient had been injured in the common area of the building and sued both the landlord and the tenant for her injuries. The landlord demanded that the tenant and the tenant’s insurer defend and indemnify it in the suit, pursuant to two provisions in its commercial lease with the tenant. In the first provision, the tenant agreed to indemnify the landlord for personal injuries arising out of the use of the premises by the tenant except were the injuries resulted from the sole negligence of the landlord. In the second provision, the tenant agreed to secure and carry liability insurance insuring both the tenant and the landlord against any claims of bodily injury arising out of the condition of the leased premises, including any common areas. The tenant’s liability insurer filed a declaratory judgment action arguing that these provisions in the lease were void under G.L. c. 186 §15.
Massachusetts statute G.L. c. 186 §15, provides that “any provision of a lease … whereby a lessee or tenant … enters into a covenant, agreement or contract … the effect of which is to indemnify the lessor or landlord … from any or all liability to the lessee or tenant, or to any other person, for any injury, loss, damage or liability arising from any omission, fault, negligence, or other misconduct of the lessor or landlord on or about the premises … shall be deemed to be against public policy and void.”
After holding that G.L. c. 186 §15 applied to commercial leases, an issue that had not previously been decided by the court, the Supreme Judicial Court next addressed whether the indemnity provision in the lease was void under G.L. c. 186 §15. The Court held that the indemnity provision was not void insofar as it applied to only liability and injury directly resulting from the negligence of the tenant. The Court held, however, that the portion of the indemnity provision that required the tenant to indemnify the landlord except for the landlord’s sole negligence, was void pursuant to the statute because this provision required the tenant to indemnify the landlord even where the landlord and tenant were jointly negligent.
Next, the Court held that the provision in the lease requiring the tenant to obtain insurance for the benefit of both the tenant and the landlord did not violate G.L. c. 186 §15. The Court first noted that unlike an indemnity provision, which requires the tenant to take responsibility for the negligence of the landlord; an insurance provision simply requires the tenant to procure insurance for the benefit of the landlord. In other words, the Court found that it is not void as against public policy to require the tenant to purchase insurance which covers the landlord’s liability. In so doing, the Massachusetts Supreme Judicial Court concurred with the courts in several other jurisdictions (including Alaska, Florida, Illinois, Nevada, and New York) which have recognized the distinction between contractual terms obligating one party to carry insurance for the benefit of another from indemnification provisions.