Source: http://webiis06.mondaq.com/unitedstates/x/712970/Insurance/Colorados+Snow+Removal+Service+Liability+Limitation+Act+Restricts+Enforceability+Of+Indemnity+Provisions
Timestamp: 2018-11-19 04:41:54
Document Index: 24991885

Matched Legal Cases: ['§ 13', '§ 13', '§ 13', '§ 13', '§ 13', '§ 13', '§ 13', '§ 30']

Colorado's Snow Removal Service Liability Limitation Act Restricts Enforceability Of Indemnity Provisions - Insurance - United States
United States: Colorado's Snow Removal Service Liability Limitation Act Restricts Enforceability Of Indemnity Provisions
Article by Ryan A. Williams
On May 30, 2018, Colorado Governor John Hickenlooper signed into law Senate Bill 18-062, referred to as the "Snow Removal Service Liability Limitation Act" (the Act), codified at C.R.S. § 13-21-129. The Act is based on model legislation drafted by the Accredited Snow Contractors Association (ASCA), which saw similar legislation pass in Illinois, with bills before lawmakers in New Jersey, New York, Pennsylvania, Indiana and Massachusetts. The primary focus of the Act is to void certain indemnity agreements that are common in condominium association and commercial property snow removal contracts. It becomes effective on August 8, 2018.
By its terms, the Act applies to contracts for the following services: (1) plowing, shoveling, or other removal of snow or other mixed precipitation from a surface; (2) deicing services; and (3) a service incidental to either (1) or (2), including operating or otherwise moving equipment or materials used for snow removal or deicing services. C.R.S. § 13-21-129(2)(d). The Act makes any effort to require indemnification for one's own negligence in such contracts void as against public policy.
An agreement by a service provider (snow removal contractor) to indemnify a service receiver (typically a property owner or property management company) from the service receiver's own acts or omissions.
An agreement by a service receiver to indemnify a service provider from the service provider's own acts or omissions.
An agreement by a service provider to hold harmless a service receiver from any tort claim arising from the service receiver's own acts or omissions.
An agreement by a service receiver to hold harmless a service provider from any tort claim arising from the service provider's own acts or omissions.
An agreement by a service provider to defend a service receiver from any tort claim arising from the service receiver's own acts or omissions.
An agreement by a service receiver to defend a service provider from any tort claim arising from the service provider's own acts or omissions.
C.R.S. § 13-21-129(3).
The new legislation, however, does not apply to contracts for services on public roads, at public utilities, or at public or other commercial airports. C.R.S. § 13-21-129(4)(a-c). It also does not apply to "an insurance policy, a surety bond, or workers' compensation." C.R.S. § 13-21-129(4)(d).
Many snow removal contractors are small companies with relatively unsophisticated business practices. Often, new business opportunities are contingent on executing a property owner's or property management company's standard contract form. Those forms are written for an owner's protection and frequently contain a broad indemnity clause, similar to the following:
Such language generally is used by owners and managers to force contractors to assume defense and indemnity obligations for the owner/manager's own fault – as terms such as "arising out of" and "based upon" can be vague and ambiguous.
The prohibitions on indemnity for one's own fault is reminiscent of Colorado's anti-indemnity statute applicable to construction professionals, codified at C.R.S. § 13-21-111.5(6). Under that provision, Colorado contractors may not be required to indemnify or defend another person against liability arising out of that person's own fault. The legislature enacted the anti-indemnity restriction in construction matters in 2007, and the provision has not been seriously challenged in any Colorado court. It is likely the Act will receive similar treatment from courts in the future and be enforced as written.
Of note to insurers is language concerning insurance policies, surety bonds, or workers' compensation, the precise application of which has yet to be determined. C.R.S. § 13-21-129(4)(d). Property owners frequently include contract terms requiring additional insured status under a service provider's policy. As language requiring additional insured status is not, by its own terms, an agreement to indemnify, hold harmless or defend, it would not appear that the Act's prohibitions would affect such requirements.
Although some states have prohibited a requirement that a party provide additional insured status to another, such requirements historically have been legislatively driven. See Ore. Rev. Stat. § 30.140 (extending a prohibition on broad indemnity to any insurer providing coverage). Absent such additional legislative action in Colorado, the current additional insured model will likely remain unchanged in the immediate future. Insurers should therefore operate as though any third party to which it granted additional insured status under a snow removal contractor's insurance policy may be entitled to coverage for any claim to which that policy applies.