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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.