Opinion ID: 1802498
Heading Depth: 1
Heading Rank: 5

Heading: valid contract to provide insurance

Text: Nashua alleges that the district court erred in holding that paragraph 10 of the contract between it and Bunch constituted an unenforceable contract of indemnification and not a valid contract to provide insurance. Neb.Rev.Stat. § 25-21,187(1) (Reissue 1995) states: In the event that a public or private contract or agreement for the construction, alteration, repair, or maintenance of a building, structure, highway bridge, viaduct, water, sewer, or gas distribution system, or other work dealing with construction or for any moving, demolition, or excavation connected with such construction contains a covenant, promise, agreement, or combination thereof to indemnify or hold harmless another person from such person's own negligence, then such covenant, promise, agreement, or combination thereof shall be void as against public policy and wholly unenforceable. This subsection shall not apply to construction bonds or insurance contracts or agreements. (Emphasis supplied.) In the instant case, the agreement to restore Nashua's tanks constitutes a private contract for the alteration, repair, or maintenance of a structure. We must determine whether the agreement requires Bunch to indemnify or hold Nashua harmless from Nashua's own negligence as prohibited by § 25-21,187 or whether the agreement requires Bunch to provide Nashua with liability insurance, in which case § 25-21,187 does not apply. This court's only previous interpretation of § 25-21,187 was in Hiway 20 Terminal, Inc. v. Tri-County Agri-Supply, Inc., 232 Neb. 763, 443 N.W.2d 872 (1989). The clause in the subcontract agreement at issue in Hiway 20 Terminal, Inc., provided in pertinent part: The Subcontractor agrees to indemnify and save harmless the Contractor from any and all loss or damage ... occasioned wholly or in part by any negligent act or omission of the Subcontractor or that of anyone directly or indirectly employed by them or performing the work of this Subcontractor under the direction of the Subcontractor or anyone for whose acts any of them may be liable in carrying out the provisions of the general contract and of this Subcontract regardless of whether or not it is caused in part by a party indemnified hereunder. (Emphasis supplied.) Id. at 768, 443 N.W.2d at 875. This court held that the final clause in this agreement, stating that the subcontractor must indemnify the general contractor even if the harm is caused by the negligence of the general contractor, is clearly invalid by application of § 25-21,187. Id. However, the instant agreement is distinguishable from the agreement held invalid in Hiway 20 Terminal, Inc. The Hiway 20 Terminal, Inc., agreement did not require the subcontractor to provide liability insurance for the general contractor but, instead, required the subcontractor to indemnify the general contractor for harm caused by the general contractor's own negligence. Conversely, the instant agreement did not require Bunch to indemnify Nashua for harm caused by Nashua's own negligence but, instead, required Bunch to provide Nashua with liability insurance. Thus, we determine that § 25-21,187 does not render the instant agreement invalid because its exception for insurance agreements is applicable. As a result, we conclude that the district court erred in holding that paragraph 10 of the contract constituted an unenforceable contract of indemnification and not a valid contract to provide insurance.