State Supreme Court Decision Highlights Need to Get Insurance and Indemnity Clauses Right in Construction Contracts

Parties to a construction contract are frequently surprised to discover that a contractual agreement to procure insurance may limit their liabilities to each other. A recent decision from the Indiana Supreme Court illustrates the effect of this rule. And, in a separate portion of the decision that will be equally significant to the construction industry, the court held that a customer’s acceptance of a contractor’s work strips third parties of the right to sue that contractor for property damage caused by the contractor’s alleged negligent workmanship.