Insurance and Indemnity clauses in construction contracts have been the subject of much discussion in recent years. Traditionally, Minnesota has prohibited risk-shifting agreements in construction contracts which require one party to indemnify another from that other party’s own negligence. However, in what was often viewed as a glaring error by the legislature, the recent amendments to the law allowed construction contracts to require subcontractors to provide insurance to cover the same problems from which the law intended to insulate subcontractors from direct liability.
Effective August 1, 2013, the statutory language has been amended in an attempt to address this issue. However, even in their attempts to clear the water, the legislature inserted language that may be interpreted to nullify the changes.
While the state of the law is still in question and in need of clear interpretation from the Courts, there is a very plain takehome message for contractors and subcontractors alike. Going forward, all contracts should be updated to reflect the numerous recent revisions to this area of law.
The attorneys at WLG are here to help you navigate these confusing issues and the recent changes.