HB 1235 2003
1	A bill to be entitled
2	An act relating to insurance under construction contracts;
3	amending s. 725.06, F.S.; including promises to insure or
4	obtain insurance for certain parties to construction
5	contracts for certain actions as void and unenforceable;
6	providing exceptions; providing for limited liability
7	protection for additional insured coverage under certain
8	agreements or contracts; prohibiting a contractor or
9	subcontractor from withholding payment to certain
10	subcontractors, sub-subcontractors, or materialmen under
11	certain insurance policies under certain circumstances;
12	providing conditions; revising application; providing an
13	effective date.
14
15	Be It Enacted by the Legislature of the State of Florida:
16
17	Section 1. Section 725.06, Florida Statutes, is amended to
18	read:
19	725.06 Construction contracts; limitation on
20	indemnification; agreements to insure.--
21	(1) Except as otherwise provided in paragraphs (a) and
22	(b),any portion of any agreement or contract for or in
23	connection with, or any guarantee of or in connection with, any
24	construction, alteration, repair, or demolition of a building,
25	structure, appurtenance, or appliance, including moving and
26	excavating associated therewith, between an owner of real
27	property,and anarchitect, engineer, general contractor,
28	subcontractor, sub-subcontractor, or materialman or any
29	combination thereof wherein any party referred to herein
30	promises to insure or obtain insurance for, indemnify,or hold
31	harmless the other party to the agreement, contract, or
32	guarantee for liability for damages to persons or property
33	caused in whole or in part by any act, omission, or default of
34	the indemnitee arising from the contract or its performance,
35	shall be void and unenforceable as against public policyunless
36	the contract contains a monetary limitation on the extent of the
37	indemnification that bears a reasonable commercial relationship
38	to the contract and is part of the project specifications or bid
39	documents, if any. Notwithstanding the foregoing, the monetary
40	limitation on the extent of the indemnification provided to the
41	owner of real property by any party in privity of contract with
42	such owner shall not be less than $1 million per occurrence,
43	unless otherwise agreed by the parties.
44	(a)Indemnification provisions in any such agreements,
45	contracts, or guarantees may notrequire that the indemnitor
46	indemnify the indemnitee for damages to persons or property
47	caused in whole or in part by any act, omission, or default of a
48	party other than:
49	1.(a) The indemnitor; or
50	2.(b)Any of the indemnitor's contractors, subcontractors,
51	sub-subcontractors, materialmen, or agents of any tier or their
52	respective employees, as long as the indemnitor also is found to
53	be at fault.; or
54	(c) The indemnitee or its officers, directors, agents, or
55	employees. However, such indemnification shall not include
56	claims of, or damages resulting from, gross negligence, or
57	willful, wanton or intentional misconduct of the indemnitee or
58	its officers, directors, agents or employees, or for statutory
59	violation or punitive damages except and to the extent the
60	statutory violation or punitive damages are caused by or result
61	from the acts or omissions of the indemnitor or any of the
62	indemnitor's contractors, subcontractors, sub-subcontractors,
63	materialmen, or agents of any tier or their respective
64	employees.
65	(b)(2)A construction contract for a public agency or in
66	connection with a public agency's project may require a party to
67	that contract to indemnify and hold harmless the other party to
68	the contract, their officers and employees, from liabilities,
69	damages, losses and costs, including, but not limited to,
70	reasonable attorney's fees, to the extent caused by the
71	negligence, recklessness, or intentional wrongful misconduct of
72	the indemnifying party and persons employed or utilized by the
73	indemnifying party in the performance of the construction
74	contract.
75	(2) If, as part of any agreement or contract for or in
76	connection with, or any guarantee of or in connection with, any
77	construction, alteration, repair, or demolition of a building,
78	structure, appurtenance, or appliance, including moving and
79	excavating associated with such activities, between the owner of
80	real property, an architect, engineer, general contractor,
81	subcontractor, sub-subcontractor, or materialman or any
82	combination of such persons, a policy of insurance extends
83	certain coverage rights to an additional insured for liability
84	arising out of the acts, errors, or omissions of the named
85	insured, such additional insured coverage shall only provide
86	liability protection to the additional insured for the imputed
87	or vicarious liability imposed on the additional insured as a
88	direct consequence of the negligent acts or omissions of the
89	named insured.
90	(3) If a subcontractor, sub-subcontractor, or materialman
91	obtains a policy of insurance extending specified coverage
92	rights to an additional insured for liability arising out of the
93	acts, errors, or omissions of the named insured, as required by
94	the general contractor or subcontractor, and a certificate or
95	policy of insurance is supplied to the general contractor or
96	subcontractor prior to the commencement of work, the general
97	contractor or subcontractor shall not use the lack of proper
98	insurance as a reason to withhold payment to the subcontractor,
99	sub-subcontractor, or materialman for work completed.
100	Commencement of work by the subcontractor, sub-subcontractor, or
101	materialman waives the right of the general contractor or the
102	subcontractor to withhold payment for that reason. This right
103	also shall apply to renewal of the certificate as long as the
104	renewal certificate is identical or contains substantially
105	similar terms as set forth in the initial certificateExcept as
106	specifically provided in subsection (2), a construction contract
107	for a public agency or in connection with a public agency's
108	project may not require one party to indemnify, defend, or hold
109	harmless the other party, its employees, officers, directors, or
110	agents from any liability, damage, loss, claim, action, or
111	proceeding, and any such contract provision is void as against
112	public policy of this state.
113	(4) This section does not affect any contracts,
114	agreements, or guarantees entered into before the effective date
115	of this section or any renewals thereof.
116	Section 2. This act shall take effect upon becoming a law.