§ 22-9-214 - Hold harmless clause in public construction contracts unenforceable. - Arkansas Statutes

22-9-214. Hold harmless clause in public construction contracts unenforceable.

(a) As used in this section:

(1) "Construction" means any of the following services, functions, or combination of the following services or functions to construct a building, building site, or structure, to construct a permanent improvement to a building, building site, or structure, including sitework:

(A) Alteration;

(B) Design;

(C) Erection;

(D) Reconditioning;

(E) Renovation;

(F) Repair; or

(G) Replacement;

(2) (A) "Public construction agreement" means an agreement in which one (1) party is a public entity and the agreement is the bargain of the parties in fact as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in 4-1-303.

(B) "Public construction agreement" does not include an insurance contract, a construction bond, or a contract to defend a party against liability; and

(3) (A) "Public construction contract" means a contract in which one (1) party is a public entity and the contract is the total legal obligation that results from the parties' agreement under this section and as supplemented by any other applicable law.

(B) "Public construction contract" does not include an insurance contract, a construction bond, or a contract to defend a party against liability.

(b) A clause in a public construction agreement or public construction contract entered into after July 31, 2007, is unenforceable as against public policy to the extent that a party to the public construction contract or public construction agreement is required to indemnify, defend, or hold harmless another party against:

(1) Damage from death or bodily injury to a person arising out of the sole negligence of the indemnitee, its agent, representative, subcontractor, or supplier; or

(2) Damage to property arising out of the sole negligence of the indemnitee, its agent, representative, subcontractor, or supplier.

(c) A provision or understanding in a public construction agreement or public construction contract that attempts to circumvent this section by making the public construction agreement or public construction contract subject to the laws of another state is unenforceable as against public policy.

(d) A clause described under subsections (b) and (c) of this section is severable from the public construction agreement or public construction contract and shall not cause the entire public construction agreement or public construction contract to become unenforceable.

(e) The parties to a public construction contract or public construction agreement may enter into an agreement in which:

(1) The first party indemnifies, defends, or holds harmless the second party from the first party's negligence or fault or from the negligence or fault of the first party's agent, representative, subcontractor, or supplier;

(2) The first party requires the second party to provide liability insurance coverage for the first party's negligence or fault if the public construction contract or public construction agreement requires the second party to obtain insurance and the public construction contract or public construction agreement limits the second party's obligation to the cost of the required insurance;

(3) The first party requires the second party to provide liability insurance coverage for the first party's negligence or fault under a separate insurance contract with an insurance provider; or

(4) The first party requires the second party to name the first party as an additional insured as a part of the public construction agreement or public construction contract.