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By: Joshua Ferguson
Pending the signature of Governor Tom Wolf, Pennsylvania will become the 4th State/Commonwealth in recent years to pass some version of an anti-indemnity law relative to snow and ice management services agreements.
The Pennsylvania House of Representatives introduced House Bill 1665, which is legislation amending Act 164 of 1970, which relates to Indemnification Agreements in certain contracts. Like Act 164, the bill itself appears to cover agreements between ”architects, engineers or surveyors and owners, contractors, subcontractors or suppliers.” The bill adds that “In a snow removal or ice control services contract between a provider and a receiver, any provision in the contract which provides that the receiver shall be indemnified, held harmless or insured by the provider from damages, claims, losses or expenses arising out of bodily injury to persons, damage to property or economic damage caused by or resulting from the receiver’s negligence, in whole or in part, shall be void if the provider has been AFFIRMATIVELY directed not to perform the snow removal or ice control services by the receiver. The Senate passed a revised version of the Bill and the house then re-voted on the revised version. It was presented to the Governor on July 7, who has ten (10) days to sign or veto the bill.
Beyond the limited Act 164 and this new bill, Pennsylvania does not have an anti-indemnity statute regarding contracts for the industries identified above. While there is some case law governing indemnity language, Pennsylvania has no clear statutory prohibition of broad and intermediate forms of indemnity. This legislation would allow only for a limited form of indemnification, exclusively for losses caused by the negligence of the indemnifying party in a scenario where that service receiver declines or directs the service provider to not provide snow or ice management services.
The Accredited Snow Contractors Association (“ASCA”) has noted several anticipated benefits to this legislation for the snow and ice management contractors. First, partially prohibiting transfer of contractual defense and indemnity for a property owner or manager’s own negligence, the property owner and/or manager has an increased reason to make sure the roadways and sidewalks are adequately treated. Additionally, a potential cause and effect is lowering ever increasing insurance premiums for snow and ice removal contractors by reducing those tender pick-ups of contractual defense and indemnity. The ASCA has advised they plan on providing seminars in both Philadelphia and Pittsburgh to discuss the impact of the bill. More information will be provided at ascaonline.org.
As mentioned above, there has also been recent anti-indemnity statutes passed specifically focused on snow and ice management contracts. Those bills were passed in Illinois, Colorado and Connecticut. For further information or for further inquiries you may contact Joshua Ferguson of Freeman Mathis & Gary, LLP, at [email protected].