SB 1271: Construction Contracts; Indemnification; Liability Provisions
The legislature finds that financial responsibility financial responsibility is a significant motive in preventing accidental losses and that the ideal system is one in which general contractors and subcontractors are all held financially responsible for the accidental losses they cause.
The legislature finds that construction workplace injuries and fatalities represent a disproportionately high share among the workforce and, as a result, contractual terms that shift loss in the construction industry have a much greater potential to cause significant harm.
The legislature finds that in recent years, construction businesses have begun to use contract provisions to either shift the financial responsibility for their negligence to others or prevent the responsible party from being determined. The legislature also finds that this system can result in the assignment of responsibility to innocent parties while the negligent parties are often not held accountable, and that this often leads to the misallocation of valuable and limited resources and ultimately generates increased costs that add little or no value to the consumer or the end product. The misallocation contributes to both a shortage in the contractor workforce and cost-prohibitive insurance policies, which could cause unnecessarily inflated housing prices in this state.
As a result of the findings listed in subsection A of this section and for additional reasons, it is the intent of the legislature to extend the provisions governing proportional liability in public contracting to private contracting. This will ensure fairness in construction contracting between general contractors and subcontractors and will create an economic climate that promotes safety in construction, fosters the availability and affordability of insurance and reduces the legal costs associated with construction claims.