Indemnity: do not pay for claims your shop did not cause

Indemnity is where a GC can try to make your shop defend or pay claims caused by someone else.

5 min readIndemnity / hold harmless / defense

Plain-English translationThe contract may say your shop has to cover the GC's losses, lawyers, or claims, even if the GC or another trade caused the problem.

Why it mattersOne broad indemnity clause can create exposure far larger than the profit on the job.

Why the words matter

Indemnity language is one of the fastest ways for a small shop to pick up giant risk. The dangerous version is not limited to what your crew caused.

Look for phrases like 'arising out of' paired with broad defense language. That can pull your shop into a claim before anyone has sorted out who actually caused the damage.

How to narrow it

Ask for proportional language. Your shop should stand behind its own work and its own mistakes. It should not become the GC's insurer for the whole project.

In Texas, some construction indemnity and additional insured provisions are restricted by statute, but details and exceptions matter. This is a good place to involve counsel on the final wording.

These guides are educational and are not legal advice. Contract enforceability changes by state, project type, and facts. Use this as a checklist, then have a construction lawyer review important final language.

Texas Insurance Code Section 151.104 Texas Civil Practice and Remedies Code Chapter 130 overview