Georgia recently adopted legislation that voids indemnity clauses in agreements for services provided by an architect, engineer, or land surveyor, unless the indemnity is limited “to the extent” caused by the negligence, recklessness, or misconduct of a party. The new law only applies to agreements that are executed after July 1, 2016; it does not affect agreements that were executed prior to that date.
For design professionals, the key issue is that the indemnity obligation is limited to the proportionate responsibility of the indemnitor. The indemnity obligation is triggered by “negligence, recklessness or misconduct,” which are generally considered reasonable triggers because they are either within the design professional’s control (recklessness or willful misconduct) or are risks that are likely to be handled by the design professional’s insurance policy (negligence). Overall, the new statute means that design professionals in Georgia can now use this law to negotiate with their clients for a more reasonable indemnity obligation.
For reference purposes, the statute language can be found below:
Georgia Code §13-8-2(c)
(c) A covenant, promise, agreement, or understanding in or in connection with or collateral to a contract or agreement for engineering, architectural, or land surveying services purporting to require that one party to such contract or agreement shall indemnify, hold harmless, insure, or defend the other party to the contract or other named indemnitee, including its, his, or her officers, agents, or employees, against liability or claims for damages, losses, or expenses, including attorney fees, is against public policy and void and unenforceable, except for indemnification for damages, losses, or expenses to the extent caused by or resulting from the negligence, recklessness, or intentionally wrongful conduct of the indemnitor or other persons employed or utilized by the indemnitor in the performance of the contract. This subsection shall not affect any obligation under workers’ compensation or coverage or insurance specifically relating to workers’ compensation, nor shall this subsection apply to any requirement that one party to the contract purchase a project specific insurance policy or project specific policy endorsement.