The Law of Indemnification and Its Interplay with Liability Insurance: A Fifty-State Survey

While this is principally a survey of the intersection between general liability insurance and an insured's separate agreement to indemnify, the discussion of relevant case law is not always limited to general liability policies where discussion and analysis of other coverage is relevant to the subject matter of this survey.

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Indemnity is compensation given to make another whole from a loss already sustained. Contractual indemnity, on the other hand, is that which is voluntarily given as security or protection to prevent his or her suffering damage. But this contractually created indemnity has potential implications on another important form of contractual indemnity: the liability insurance policy.

The ultimate question is whether the indemnity agreement is enforceable and what impact it has on the insurance obligation. A uniform format is followed in each of the state summaries:

  • Section 1 - General Rules of Contractual Indemnity: A preliminary discussion of indemnity agreements.
  • Section 2 - Exceptions to General Rules of Contractual Indemnity: Identifies statutory or judicially created exceptions to the general rules applicable to contracts of indemnity.
  • Section 3 - Indemnity Agreements as Insured Contracts: Addresses the extent to which an insured’s agreement to indemnify a third party constitutes an ""insured contract"" under the state law, negating the exclusion for contractually assumed liability to the extent of the indemnity.
  • Section 4 - Operation of an Agreement to Indemnify Referring to or Requiring Insurance: Addresses the interplay between an insured’s agreement to indemnify a third party, which is combined with a reference to first- or third-party insurance.

While this is principally a survey of the intersection between general liability insurance and an insured’s separate agreement to indemnify, the discussion of relevant case law is not always limited to general liability policies where discussion and analysis of other coverage is relevant to the subject matter of this survey.

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