Contracts

Indemnification Clauses

Background:

Many clients, including state and local units of government are requiring engineering firms to provide indemnification for losses not directly attributable to the engineering firms acts or omissions. These clauses require firms to indemnify their clients and others for their liabilities. Insurance is not available for this type of risk and firms are put in a very precarious position by being required to sign contracts for risks that cannot be insured. Current statutes state that the owner cannot require the contractor (engineer) to provide indemnification for which there is no insurance available. Owners routinely ignore the law and insist that these onerous provisions be included in contracts even though the insurance is not available. If the engineering firm does not sign the contract with these uninsurable provisions, they risk losing the project and in may cases, are compelled to sign rather than walk away.

ACEC/MN Position
Extending the engineering firm’s liability to the acts of others is uninsurable and unfair and technically illegal. Engineers should be held accountable for their errors and omissions, but not the acts of others. 

 

We support legislation that clearly states that owners can only require the design professional to indemnify for their “errors or omissions.”