Sub May Have to Pay Defense Fees Under Hold Harmless

Kegler Brown Construction Newsletter

Ohio has an anti-indemnification statute that prohibits one party to a construction contract (i.e., subcontractor) to be required to indemnify another (i.e., general contractor) from his own negligence resulting in personal injury or property damage. Ohio Revised Code ยง2305.31.

However, this anti-indemnification statute does not necessarily mean that the promising party (i.e., subcontractor) will not have to pay the legal fees to defend against such a claim against the other party (i.e., general contractor).

A recent decision by the Ohio Supreme Court found that a hold harmless clause obligates the subcontractor to defend the contractor from claims against the contractor arising from the subcontractor's work or to pay such fees. Kemmeter v. McDaniel Backhoe Serv. (2000), 89 Ohio St. 3d 409.

This case re-emphasizes the need for contractors and subcontractors to closely scrutinize indemnification clauses and to see that any risks are properly insured with appropriate contract liability coverage.