Indemnification clauses in construction contracts: broad, intermediate and limited form
An indemnification clause makes one party cover another's losses from third-party claims. Broad form covers the other party even when it is solely at fault; intermediate form covers it when it is partly at fault; limited form covers only your own share. AIA A201-2017 Section 3.18 is limited form, and Texas Insurance Code Chapter 151 voids most broader clauses.
This guide is general information, not legal advice. Statutes and cases are cited as checked on 2026-10-21; have counsel confirm how they apply to your contract and state.
What are the three forms of indemnity?
The forms differ on one question: who pays when the party being protected (the indemnitee) caused the loss.
| Form | You pay when the indemnitee is | Wording to look for | Exposure |
|---|---|---|---|
| Broad | Solely at fault, as well as partly or not at all | "including claims caused by the sole negligence of the Indemnitee" | Highest. You carry losses you did not cause. |
| Intermediate | Partly at fault: you pay the whole loss, including their share | "caused in whole or in part by Subcontractor, regardless of whether caused in part by an Indemnitee" | High. A small share of fault can make you pay for all of it. |
| Limited (comparative) | Never for their share; you pay only your own | "but only to the extent caused by the negligent acts or omissions of Subcontractor" | Tracks your own fault. |
What does AIA A201 Section 3.18 say?
AIA A201-2017 3.18.1 is limited form. The contractor indemnifies the owner, the architect, the architect's consultants and their agents and employees, but only for claims for bodily injury, sickness, disease or death, or damage to tangible property other than the Work itself, and "only to the extent caused by" the negligence of the contractor, its subs or anyone they are responsible for. ConsensusDocs 200 10.1.1 uses the same limited approach, and 10.1.2 adds an indemnity from the owner back to the constructor.
Supplementary conditions and GC subcontract forms often widen it. Flag these edits:
- "Only to the extent" deleted, which turns limited form into intermediate or broad form.
- Scope widened from bodily injury and property damage to "any and all claims", including economic loss, fines and penalties.
- A duty to defend added. Defense costs are owed as claims arrive, often before anyone decides fault.
- Triggers widened to the indemnitor's "breach of contract" or "violation of law", not just negligence.
- More indemnitees: lenders, affiliates, the owner's other consultants.
What is an anti-indemnity statute?
A state law that voids construction indemnity clauses to the extent they make one party pay for another's negligence. Many states have one, and they differ: some void only broad form, some also void intermediate form, some reach additional insured requirements, and many exempt certain projects. Texas is a useful worked example because its statute covers all three.
How does Texas Insurance Code Chapter 151 limit indemnity?
Texas Insurance Code Chapter 151, in effect since January 1, 2012, sets these rules for construction contracts, including subcontracts:
- Void provision (151.102). An indemnity, hold harmless or defend obligation is void to the extent it covers a claim caused by the negligence or fault, statutory violation or breach of contract of the indemnitee, its agent or employee, or a third party under its control.
- Employee exception (151.103). The rule does not apply to claims for bodily injury or death of an employee of the indemnitor, its agent or its subcontractor of any tier.
- Additional insured (151.104). A requirement to buy additional insured coverage is void to the same extent, with a narrow carve-out for consolidated insurance programs (OCIP or CCIP).
- Exclusions (151.001 and 151.105). The chapter does not reach a single family house, townhouse or duplex, a public works project of a municipality, surety indemnity agreements and several other categories listed in 151.105.
Outside Chapter 151, Texas courts still apply the fair notice rules: an indemnity for the indemnitee's own negligence must say so expressly (Ethyl Corp. v. Daniel Construction Co., 725 S.W.2d 705 (Tex. 1987)) and must be conspicuous (Dresser Industries v. Page Petroleum, 853 S.W.2d 505 (Tex. 1993)).
| Texas scenario | Subcontract says | Likely result under Chapter 151 |
|---|---|---|
| GC's crane strikes a passerby on an office job | Sub indemnifies GC "regardless of GC's negligence" | Void to the extent of the GC's fault (151.102) |
| Sub's own laborer is injured, partly through GC fault | Same clause | Can be enforced: employee exception (151.103) |
| Sub must name GC as additional insured for GC's own negligence | Insurance exhibit | Void to the same extent (151.104), unless a consolidated program applies |
| City public works project | Broad form indemnity | Chapter 151 excluded (151.105); contract terms and fair notice rules govern |
What should you check in the subcontract flow-down?
AIA A201-2017 5.3 requires the GC to bind each sub to the contract documents for its own work, so the prime indemnity reaches subs through the subcontract. Check that the sub's indemnity mirrors the prime and does not go beyond it, that the indemnitee list matches, and that the insurance exhibit does not ask for coverage the anti-indemnity statute would void. Dora, BAU AI's contract review agent, classifies each indemnity clause as broad, intermediate or limited form, compares it with A201 3.18 and ConsensusDocs 200 10.1, and cites the clause and page for counsel.
Indemnification review checklist
- Which form is it: broad, intermediate or limited? Is "only to the extent" present?
- Is there a duty to defend, and when does it start?
- What claims are covered: bodily injury and property damage only, or "any and all"?
- Who are the indemnitees, and do they match the prime contract?
- Is the obligation capped, or tied to required insurance limits?
- Which state's anti-indemnity statute applies, and does the project fall in an exclusion?
- Do additional insured requirements go further than the indemnity itself?
- Is the clause conspicuous and express enough to meet the state's fair notice rules?
Frequently asked questions
What is the difference between indemnify and hold harmless?
Contracts usually use them together. Indemnify means paying another party's covered losses; hold harmless adds a promise not to hold that party liable. Read the clause as a whole rather than relying on either word alone.
Is a duty to defend different from a duty to indemnify?
Yes. A duty to defend means paying legal defense costs as claims are made, often before fault is decided. Texas Insurance Code 151.102 covers agreements to defend as well as to indemnify.
Does Texas Chapter 151 apply to homebuilding?
No. The chapter excludes a single family house, townhouse, duplex or land development directly related to them (151.001 and 151.105).
Can a Texas GC still require a sub to indemnify for injuries to the sub's own workers?
Yes. Insurance Code 151.103 exempts claims for bodily injury or death of an employee of the indemnitor, its agent or its subcontractor of any tier.
Is AIA A201 indemnity broad form?
No. A201-2017 3.18.1 applies only to the extent the contractor's side was negligent, and only to bodily injury and property damage other than the Work itself. It becomes broader only if the parties edit it.