Construction Anti-Indemnity Statute Expanded

For decades, Michigan law has prohibited construction contract language that made one party indemnify or be responsible for another party’s sole negligence. The law did allow, however, for indemnification of a public or private owner without a prorated division of liability regardless of the level of fault.

The legislature recently amended this statute.  The new statute took effect March 1, 2013 and adds to the old statute as follows:

Private Owners

Previously, the statute only applied to contracts for construction, alteration, repair or maintenance of a building, structure, appurtenance and appliance, including moving, demolition, and excavating.

The new statute adds the following:

• A highway or road
• A bridge
• A water line and a sewer line
• Or any other infrastructure or improvement to real property

The new statute does not require a prorated division of liability regardless of fault, where the owner is private.

Public Entities

The big changes affect public entities, which include the state and all state agencies, incorporated and non-incorporated local authorities and their agencies, cities, villages, townships, counties, school districts, intermediate school districts, authorities, and community and junior colleges. Institutions of higher learning as defined in Section 4 or 6 of Article 8 of the Constitution are not included.   

"Public entity" also includes these entities’ employees and agents, including their construction managers or other business arrangements retained by or contracting with the public entity to manage or administer its contract. 

Public entities are now prohibited from requiring a Michigan-licensed architect, professional engineer, landscape architect or professional surveyor or contractor from defending the public entity or any other party from claims, or to assume any liability for the public entity or any other party for any amount greater than the degree of fault of the named licensed professionals or contractor.

The new statute states that a contract provision executed in violation of this section is void and unenforceable. 

If you have questions about the new anti-indemnity statute, please contact David Lick or Liza Moore at Foster Swift.