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By: Courtney Mazzio
Recently, there has been a movement in the snow and ice management industry to reduce the ability of contracting parties to transfer risk in the service contracts through indemnification clauses. To that end, there are anti-indemnification bills in various stages of the legislative process throughout the country. The Snow Removal Service Liability Limitation Act has passed in Illinois and been signed into law by the Governor. The Act provides that it is against public policy and void for a snow and ice removal contract to require a snow and ice management contractor or customer to: (1) indemnify the other for their own negligence; (2) hold the other harmless for their own negligence; or (3) impose a duty to defend the other for their own negligence. Similar legislation is pending in other states, including in Michigan, Wisconsin, Indiana, New York, New Jersey, and Pennsylvania. The New Jersey bill has already passed the Senate and is awaiting a vote in the House of Representatives. The Pennsylvania bill is in Committee, and testimony has been provided on the bill by our own Josh Ferguson.
The Accredited Snow Contractors Association has noted several anticipated benefits to this legislation for the snow and ice management contractors. First, prohibiting transfer of contractual defense and indemnity for a property owner or manager’s own negligence, the property owner and/or manager has their own interest in insuring the roadways and sidewalks are adequately treated. Additionally, a potential side effect this statute could have is lowering ever increasing insurance premiums for snow and ice removal contractors by avoiding those tenders of defense and indemnity.