Indemnity in Texas

Except as provided by Section 151.103 , a provision in a construction contract, or in an agreement collateral to or affecting a construction contract, is void and unenforceable as against public policy to the extent that it requires an indemnitor to indemnify, hold harmless, or defend a party, including a third party, against a claim caused by the negligence or fault, the breach or violation of a statute, ordinance, governmental regulation, standard, or rule, or the breach of contract of the indemnitee, its agent or employee, or any third party under the control or supervision of the indemnitee, other than the indemnitor or its agent, employee, or subcontractor of any tier.

Section 151.102 does not apply to a provision in a construction contract that requires a person to indemnify, hold harmless, or defend another party to the construction contract or a third party against a claim for the bodily injury or death of an employee of the indemnitor, its agent, or its subcontractor of any tier.

(a) This subchapter applies to a construction contract for a construction project for which an indemnitor is provided or procures insurance subject to: (1) this chapter; or (2) Title 10. (b) Subsection (a) applies regardless of whether the insurance is provided or procured before or after execution of the contract.

(1) "Consolidated insurance program" means a program under which a principal provides general liability insurance coverage, workers' compensation insurance coverage, or both that are incorporated into an insurance program for a single construction project or multiple construction projects. (2) "Construction project" means construction, remodeling, maintenance, or repair of improvements to real property. The term includes the immediate construction location and areas incidental and necessary to the work as defined in the construction contract documents. A construction project under this chapter does not include a single family house, townhouse, duplex, or land development directly related thereto. (3) "Contractor" means any person who has entered into a construction contract or a professional services contract and is enrolled in the consolidated insurance program. (4) "Claim" includes a loss or liability for a claim, damage, expense, or governmentally imposed fine, penalty, administrative action, or other action.

(5) "Construction contract" means a contract, subcontract, or agreement, or a performance bond assuring the performance of any of the foregoing, entered into or made by an owner, architect, engineer, contractor, construction manager, subcontractor, supplier, or material or equipment lessor for the design, construction, alteration, renovation, remodeling, repair, or maintenance of, or for the furnishing of material or equipment for, a building, structure, appurtenance, or other improvement to or on public or private real property, including moving, demolition, and excavation connected with the real property. The term includes an agreement to which an architect, engineer, or contractor and an owner's lender are parties regarding an assignment of the construction contract or other modifications thereto. (6) "Indemnitor" means a party to a construction contract that is required to provide indemnification or additional insured status to another party to the construction contract or to a third party.

(a) Except as provided by Subsection (b), a provision in a construction contract that requires the purchase of additional insured coverage, or any coverage endorsement, or provision within an insurance policy providing additional insured coverage, is void and unenforceable to the extent that it requires or provides coverage the scope of which is prohibited under this subchapter for an agreement to indemnify, hold harmless, or defend. (b) This section does not apply to a provision in an insurance policy, or an endorsement to an insurance policy, issued under a consolidated insurance program to the extent that the provision or endorsement lists, adds, or deletes named insureds to the policy.

This subchapter does not affect: (1) an insurance policy, including a policy issued under an owner-controlled or owner-sponsored consolidated insurance program or a contractor-controlled or contractor-sponsored consolidated insurance program, except as provided by Section 151.104 ; (2) a cause of action for breach of contract or warranty that exists independently of an indemnity obligation, including an indemnity obligation in a construction contract under a construction project for which insurance is provided under a consolidated insurance program; (3) indemnity provisions contained in loan and financing documents, other than construction contracts to which the contractor and owner's lender are parties as provided under Section 151.001 (5); (4) general agreements of indemnity required by sureties as a condition of execution of bonds for construction contracts; (5) the benefits and protections under the workers' compensation laws of this state; (6) the benefits or protections under the governmental immunity laws of this state; (7) agreements subject to Chapter 127 , Civil Practice and Remedies Code; (8) a license agreement between a railroad company and a person that permits the person to enter the railroad company's property as an accommodation to the person for work under a construction contract that does not primarily benefit the railroad company; (9) an indemnity provision pertaining to a claim based upon copyright infringement; (10) an indemnity provision in a construction contract, or in an agreement collateral to or affecting a construction contract, pertaining to: (A) a single family house, townhouse, duplex, or land development directly related thereto; or (B) a public works project of a municipality; or (11) a joint defense agreement entered into after a claim is made.

A provision of this chapter may not be waived by contract or otherwise.

(a) A covenant or promise in, in connection with, or collateral to a construction contract is void and unenforceable if the covenant or promise provides for a contractor who is to perform the work that is the subject of the construction contract to indemnify or hold harmless a registered architect, licensed engineer, or land surveyor, or an agent, servant, or employee of a registered architect, licensed engineer, or land surveyor from liability for damage that: (1) is caused by or results from: (A) defects in plans, designs, or specifications prepared, approved, or used by the architect, engineer, or land surveyor; or (B) negligence of the architect, engineer, or land surveyor in the rendition or conduct of professional duties called for or arising out of the construction contract and the plans, designs, or specifications that are a part of the construction contract; and (2) arises from: (A) personal injury or death; (B) property injury; or (C) any other expense that arises from personal injury, death, or property injury.

(2) arises from: (A) personal injury or death; (B) property injury; or (C) any other expense that arises from personal injury, death, or property injury. (b) A covenant or promise in, in connection with, or collateral to a construction contract other than a contract for a single family or multifamily residence is void and unenforceable if the covenant or promise provides for a registered architect, licensed engineer, or land surveyor whose engineering, architectural, or land surveying design services are the subject of the construction contract to indemnify or hold harmless an owner or owner's agent or employee from liability for damage that is caused by or results from the negligence of an owner or an owner's agent or employee.

(c) Except as provided by Subsection (d), (e), or (f), a covenant or promise in, in connection with, or collateral to a construction contract for engineering, architectural, or land surveying services related to an improvement to real property is void and unenforceable to the extent the covenant or promise provides that a licensed engineer, registered architect, or land surveyor must defend a party, including a third party, against a claim based wholly or partly on the negligence of, fault of, or breach of contract by the owner, the owner's agent, the owner's employee, or another entity over which the owner exercises control. A covenant or promise in, in connection with, or collateral to a contract for engineering, architectural, or land surveying services related to an improvement to real property may provide for the reimbursement of an owner's reasonable attorney's fees in proportion to the engineer's, architect's, or land surveyor's liability.

This chapter does not apply to a contract or agreement in which an architect, engineer, or land surveyor, or an agent, servant, or employee of an architect, engineer, or land surveyor, is indemnified from liability for: (1) negligent acts other than those described by this chapter; or (2) negligent acts of the contractor, any subcontractor, any person directly or indirectly employed by the contractor or a subcontractor, or any person for whose acts the contractor or a subcontractor may be liable.

(d) Notwithstanding Subsection (c), an owner that is a party to a contract for engineering, architectural, or land surveying services related to an improvement to real property may require in the contract that the engineer, architect, or land surveyor name the owner as an additional insured under any of the engineer's, architect's, or land surveyor's insurance coverage to the extent additional insureds are allowed under the policy and provide any defense to the owner provided by the policy to a named insured. (e) Subsection (c) does not apply to a contract for services in which an owner contracts with an entity to provide both design and construction services. (f) Subsection (c) does not apply to a covenant to defend a party, including a third party, for a claim of negligent hiring of the architect, engineer, or land surveyor.

(1) "Construction contract" means a contract or agreement made and entered into by an owner, contractor, subcontractor, registered architect, licensed engineer, land surveyor, or supplier concerning the design, construction, alteration, repair, or maintenance of a building, structure, appurtenance, road, highway, bridge, dam, levee, or other improvement to or on real property, including moving, demolition, and excavation connected with the real property. (2) "Land surveyor" means a registered professional land surveyor or licensed state land surveyor as those terms are defined by Section 1071.002 , Occupations Code.

This chapter does not apply to: (1) an insurance contract; or (2) a workers' compensation agreement.

(a) Except as provided by Section 130.002 (b) or (c) or Section 130.0021 , this chapter does not apply to an owner of an interest in real property or persons employed solely by that owner. (b) Except as provided by Section 130.002 (b) or (c) or Section 130.0021 , this chapter does not prohibit or make void or unenforceable a covenant or promise to: (1) indemnify or hold harmless an owner of an interest in real property and persons employed solely by that owner; or (2) allocate, release, liquidate, limit, or exclude liability in connection with a construction contract between an owner or other person for whom a construction contract is being performed and a registered architect, licensed engineer, or land surveyor.

(a) A construction contract for architectural, engineering, or land surveying services or a contract related to the construction or repair of an improvement to real property that contains architectural, engineering, or land surveying services as a component part must require that the architectural, engineering, or land surveying services be performed with the professional skill and care ordinarily provided by competent architects, engineers, or land surveyors practicing under the same or similar circumstances and professional license. (b) If a contract described by Subsection (a) contains a provision establishing a different standard of care than the standard described by Subsection (a): (1) the provision is void and unenforceable; and (2) the standard of care described by Subsection (a) applies to the performance of the architectural, engineering, or land surveying services. (c) Section 130.004 does not limit the applicability of this section.

Except as provided by Section 151.103 , a provision in a construction contract, or in an agreement collateral to or affecting a construction contract, is void and unenforceable as against public policy to the extent that it requires an indemnitor to indemnify, hold harmless, or defend a party, including a third party, against a claim caused by the negligence or fault, the breach or violation of a statute, ordinance, governmental regulation, standard, or rule, or the breach of contract of the indemnitee, its agent or employee, or any third party under the control or supervision of the indemnitee, other than the indemnitor or its agent, employee, or subcontractor of any tier.

(a) This subchapter applies to a construction contract for a construction project for which an indemnitor is provided or procures insurance subject to: (1) this chapter; or (2) Title 10. (b) Subsection (a) applies regardless of whether the insurance is provided or procured before or after execution of the contract.

(a) Except as otherwise provided by this chapter, a covenant, promise, agreement, or understanding contained in, collateral to, or affecting an agreement pertaining to a well for oil, gas, or water or to a mine for a mineral is void if it purports to indemnify a person against loss or liability for damage that: (1) is caused by or results from the sole or concurrent negligence of the indemnitee, his agent or employee, or an individual contractor directly responsible to the indemnitee; and (2) arises from: (A) personal injury or death; (B) property injury; or (C) any other loss, damage, or expense that arises from personal injury, death, or property injury.

(a) This chapter does not apply to an agreement that provides for indemnity if the parties agree in writing that the indemnity obligation will be supported by liability insurance coverage to be furnished by the indemnitor subject to the limitations specified in Subsection (b) or (c). (b) With respect to a mutual indemnity obligation, the indemnity obligation is limited to the extent of the coverage and dollar limits of insurance or qualified self-insurance each party as indemnitor has agreed to obtain for the benefit of the other party as indemnitee. (c) With respect to a unilateral indemnity obligation, the amount of insurance required may not exceed $500,000.

(1) "Agreement pertaining to a well for oil, gas, or water or to a mine for a mineral": (A) means: (i) a written or oral agreement or understanding concerning the rendering of well or mine services; or (ii) an agreement to perform a part of those services or an act collateral to those services, including furnishing or renting equipment, incidental transportation, or other goods and services furnished in connection with the services; but (B) does not include a joint operating agreement.

(2) "Joint operating agreement" means an agreement between or among holders of working interests or operating rights for the joint exploration, development, operation, or production of minerals. (3) "Mutual indemnity obligation" means an indemnity obligation in an agreement pertaining to a well for oil, gas, or water or to a mine for a mineral in which the parties agree to indemnify each other and each other's contractors and their employees against loss, liability, or damages arising in connection with bodily injury, death, and damage to property of the respective employees, contractors or their employees, and invitees of each party arising out of or resulting from the performance of the agreement. (4) "Well or mine service": (A) includes: (i) drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, purchasing, gathering, storing, or transporting oil, brine water, fresh water, produced water, condensate, petroleum products, or other liquid commodities, or otherwise rendering services in connection with a well drilled to produce or dispose of oil, gas, other minerals or water; and (ii) designing, excavating, constructing, improving, or otherwise rendering services in connection with a mine shaft, drift, or other structure intended for use in exploring for or producing a mineral; but (B) does not include: (i) purchasing, selling, gathering, storing, or transporting gas or natural gas liquids by pipeline or fixed associated facilities; or (ii) construction, maintenance, or repair of oil, natural gas liquids, or gas pipelines or fixed associated facilities. (5) "Wild well" means a well from which the escape of oil or gas is not intended and cannot be controlled by equipment used in normal drilling practice. (6) "Unilateral indemnity obligation" means an indemnity obligation in an agreement pertaining to a well for oil, gas, or water or to a mine for a mineral in which one of the parties as indemnitor agrees to indemnify the other party as indemnitee with respect to claims for personal injury or death to the indemnitor's employees or agents or to the employees or agents of the indemnitor's contractors but in which the indemnitee does not make a reciprocal indemnity to the indemnitor.

This chapter does not apply to loss or liability for damages or an expense arising from: (1) personal injury, death, or property injury that results from radioactivity; (2) property injury that results from pollution, including cleanup and control of the pollutant; (3) property injury that results from reservoir or underground damage, including loss of oil, gas, other mineral substance, or water or the well bore itself; (4) personal injury, death, or property injury that results from the performance of services to control a wild well to protect the safety of the general public or to prevent depletion of vital natural resources; or (5) cost of control of a wild well, underground or above the surface.

(4) "Well or mine service": (A) includes: (i) drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, purchasing, gathering, storing, or transporting oil, brine water, fresh water, produced water, condensate, petroleum products, or other liquid commodities, or otherwise rendering services in connection with a well drilled to produce or dispose of oil, gas, other minerals or water; and (ii) designing, excavating, constructing, improving, or otherwise rendering services in connection with a mine shaft, drift, or other structure intended for use in exploring for or producing a mineral; but (B) does not include: (i) purchasing, selling, gathering, storing, or transporting gas or natural gas liquids by pipeline or fixed associated facilities; or (ii) construction, maintenance, or repair of oil, natural gas liquids, or gas pipelines or fixed associated facilities.

This chapter does not deprive an owner of the surface estate of the right to secure indemnity from a lessee, an operator, a contractor, or other person conducting operations for the exploration or production of minerals of the owner's land.

(b) Certain agreements that provide for indemnification of a negligent indemnitee are against the public policy of this state. (c) The legislature finds that joint operating agreement provisions for the sharing of costs or losses arising from joint activities, including costs or losses attributable to the negligent acts or omissions of any party conducting the joint activity: (1) are commonly understood, accepted, and desired by the parties to joint operating agreements; (2) encourage mineral development; (3) are not against the public policy of this state; and (4) are enforceable unless those costs or losses are expressly excluded by written agreement.

This chapter does not affect: (1) the validity of an insurance contract; or (2) a benefit conferred by the workers' compensation statutes of this state.