Date: Apr 2, 2014
On August 1, 2013, Minnesota’s legislature enacted a significant amendment to the statute governing indemnification and risk-shifting in construction contracts.
Before this statutory amendment, Minnesota statutes generally prohibited a General Contractor from requiring a Subcontractor to indemnify the General Contractor for its own negligence, omissions or bad acts. Minn. Stat. § 337.051. However, the pre-amendment version of this statute also included a large exception to the general prohibition that permitted contract provisions requiring the Subcontractor to procure insurance that covers the cost to indemnify a General Contractor for its own negligence. Minn. Stat. § 337.02 (stating that the general prohibition does “not affect the validity of agreements whereby a promisor agrees to provide specific insurance coverage for the benefit of others”). Practically speaking, this exception eclipsed the general prohibition. And, as a matter of course, most construction contract agreements included provisions that took advantage of the exception and required Subcontractors to procure insurance to indemnify a General Contractor for its own negligence.
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