Can Additional Insured Requirements Avoid Ohio’s Anti-Indemnity Statute?
Kegler Brown Construction Newsletter December 1, 2005
Ohio has an anti-indemnity statute that makes any construction contract provision that attempts to require one to indemnify another for the other's own negligence (in whole or in part) unenforceable as against public policy. R.C. §2305.31. This statute recognizes the inherent unfairness associated with making another indemnify you for your own negligence.
However, since most of these statutes were enacted by states in the 1970's there have been two developments that threaten the effectiveness of them. The first is that most current indemnity provisions also include a "duty to defend" while most of the old statutes do not reference "defense" but only "indemnity". The second is the common practice today of requiring by contract the naming of "additional insureds".
With respect to the defense issue, two Ohio cases, both involving an identical indemnity clause in Dayton Power and Light's contract, illustrate the problem and culminated in completely different judicial results. The Second District view is that one still has to pay attorney's fees and expenses to defend the claim for which there can be no liability for personal injury or property damage (due to the statute) under a "duty to defend" (Moore v. Dayton Power and Light, 99 Ohio App.3d 135) while the Ninth District view is that any duty to defend is unenforceable if the underlying claim for loss is unenforceable. (Best v. Energized Substation, 1994 WL 440471).
With respect to the "additional insured" issue, there also have been differing results here in Ohio. Cases like Brzeczek v. Standard Oil, 4 Ohio App.3d 209 (1982) and Stickovitch v. Cleveland, 143 Ohio App.3d 13 (2001) have suggested that one can secure "broad form indemnity" through proper additional insured coverage, while cases like Liberty Mutual Insurance Group v. Zavarella Brothers Construction, 121 Ohio App.3d 147 (1997) have stated that "if we were to read the additional insured clause as permitting [the general contractor], to be insured against his own negligence, it would run counter to the public policy set forth in [the anti-indemnity] provisions of the statute." The bottom line is that Ohio's law is quite confusing on this subject.
It seems unfair and inequitable to say that it is the public policy of this state to prevent one from forcing another to indemnify him from his own negligence, but at the same time require one to pay the attorney's fees and expenses incurred defending the underlying claim; or that "broad form indemnity" (declared unenforceable in the anti-indemnity statute) is permitted if you simply require "additional insured" status.
The legislature, or Ohio's Supreme Court, needs to address these issues so that the law in this area can finally be clarified.