32-1159.01. Indemnity agreements in construction and architect-engineer dwelling contracts void; definitions

605 words·~3 min read·/az/title-32/32-1159-01

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. Notwithstanding section 32-1159, a covenant, clause or understanding in, collateral to or affecting a construction contract or architect-engineer professional service contract involving a dwelling that purports to insure, to indemnify or to hold harmless the promisee from or against liability for loss or damage is against the public policy of this state and is void only to the extent that it purports to insure, to indemnify or to hold harmless the promisee from or against liability for loss or damage resulting from the negligence of the promisee or the promisee's indemnitees, employees, subcontractors, consultants or agents other than the promisor.

B. Notwithstanding subsection A of this section, a contractor who is responsible for the performance of a construction contract may fully indemnify a person for whose account the construction contract is not being performed and who, as an accommodation, enters into an agreement with the contractor that allows the contractor to enter on or adjacent to its property to perform the construction contract for others.

C. Any additional insured endorsement furnished pursuant to an agreement or collateral to a construction contract involving a dwelling does not obligate the insurer to indemnify the additional insured for the percentage of fault that is allocated to the additional insured. This subsection does not limit an insurer's duty to defend an additional insured pursuant to the terms and conditions of an additional insured endorsement.

D. A covenant, clause or understanding in, collateral to or affecting a construction contract or architect-engineer professional service contract that requires the promisor to defend the promisee is limited to defending claims arising out of or related to the promisor's work or operations.

E. This section applies to all construction contracts and architect-engineer professional service contracts involving a dwelling entered into between private parties.

F. This section does not apply to:

1. An agreement to which this state or a political subdivision of this state is a party, including an intergovernmental agreement and an agreement governed by sections 34-226 and 41-2586.

2. Agreements entered into by agricultural improvement districts under title 48, chapter 17.

3. An agreement for indemnification of a surety on a payment or performance bond by its principal or indemnitors.

4. An agreement between an insurer under an insurance policy or contract and its named insureds.

5. An agreement between an insurer under an insurance policy or contract and its additional insureds, except that this type of agreement is subject to the limitations of subsections A, B and C of this section.

6. An agreement between an insurer and its insureds under a single insurance policy or contract for a defined project or workplace, except that such agreement may not require or allow one or more insureds under the agreement to indemnify, to hold harmless or to defend any other insured under the agreement beyond the limitations of subsections A, B and C of this section.

7. A public service corporation's rules, regulations or tariffs that are approved by the corporation commission.

G. For the purposes of this section:

1. "Architect-engineer professional service contract" means a written or oral agreement relating to the survey, design, design-build, construction administration, study, evaluation or other professional services furnished in connection with any actual or proposed construction, alteration, repair, maintenance, moving, demolition or excavation of any structure, street or roadway, appurtenance or other development or improvement to land.

2. "Construction contract" means a written or oral agreement relating to the actual or proposed construction, alteration, repair, maintenance, moving, demolition or excavation of any structure, street or roadway, appurtenance or other development or improvement to land.

3. "Dwelling" has the same meaning prescribed in section 12-1361.