Inside208

Indemnification Bill for Contractors Passes Senate

Posted on December 14, 2012 by Dene Westbrook

The Legislature has passed HB 5466 and sent it to the Governor for his signature. This bill will prohibit a public entity from requiring a contractor, architect, engineer, or surveyor to defend the public entity or any other party from liability claims  or to indemnify the public entity or other party for any amount greater than the degree of fault of the contractor, architect, engineer, or surveyor.

The bill would take effect on September 1, 2012.  “Public entity” would mean the State and all of its agencies; any public body corporate within the State and all agencies of that body; or any nonincorporated public body within Michigan, of whatever nature, and all agencies of that body.  This would include cities, villages, townships, counties, school districts, intermediate school districts, authorities, and their employees and agents, including construction managers retained by the public entity. Universities were originally included but then exempted from the legislation.

The League expressed opposition to this bill because it will allow these people who contract with local units of government to do things that affect those local units of government then not have to defend those local units of government in court.

Samantha Harkins is the Director of State Affairs for the League and handles municipal finance and labor issues. She can be reached at 517-908-0306 or email at sharkins@mml.org.

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