Minnesota Legislature
SF 754
as introduced - 93rd Legislature (2023 - 2024) Posted on 03/10/2023 04:54pm
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A bill for an act
relating to contracts; modifying and clarifying requirements relating to building
and construction contracts; amending Minnesota Statutes 2022, sections 15.71, by
adding subdivisions; 15.72, by adding a subdivision; 337.01, subdivision 3; 337.05,
subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2022, section 15.71, is amended by adding a subdivision
to read:
Subd. 1a.
Indemnification agreement.
"Indemnification agreement" means an agreement
by the promisor to indemnify, defend, or hold harmless the promisee against liability or
claims of liability for damages arising out of bodily injury to persons or out of physical
damage to tangible or real property.
Sec. 2.
Minnesota Statutes 2022, section 15.71, is amended by adding a subdivision to
read:
Subd. 1b.
Promisee.
"Promisee" includes that party's independent contractors, agents,
employees, or indemnitees.
Sec. 3.
Minnesota Statutes 2022, section 15.72, is amended by adding a subdivision to
read:
Subd. 3.
Unenforceability of certain agreements.
(a) An indemnification agreement
contained in, or executed in connection with, a contract for a public improvement is
unenforceable except to the extent that:
(1) the underlying injury or damage is attributable to the negligent or otherwise wrongful
act or omission, including breach of a specific contractual duty, of the promisor or the
promisor's independent contractors, agents, employees, or delegatees; or
(2) an owner, a responsible party, or a governmental entity agrees to indemnify a
contractor directly or through another contractor with respect to strict liability under
environmental laws.
(b) A provision in a public building or construction contract that requires a party to
provide insurance coverage to one or more other parties, including third parties, for the
negligence or intentional acts or omissions of any of those other parties, including third
parties, is against public policy and is void and unenforceable.
(c) Paragraph (b) does not affect the validity of a provision that requires a party to provide
or obtain workers' compensation insurance, construction performance or payment bonds,
builder's risk policies, or owner or contractor-controlled insurance programs or policies.
(d) Paragraph (b) does not affect the validity of a provision that requires the promisor
to provide or obtain insurance coverage for the promisee's vicarious liability, or liability
imposed by warranty, arising out of the acts or omissions of the promisor.
(e) Paragraph (b) does not apply to building and construction contracts for work within
50 feet of public or private railroads, or railroads regulated by the Federal Railroad
Administration.
Sec. 4.
Minnesota Statutes 2022, section 337.01, subdivision 3, is amended to read:
Subd. 3.
Indemnification agreement.
"Indemnification agreement" means an agreement
by the promisor to indemnify, defend, or hold harmless the promisee against liability or
claims of liability for damages arising out of bodily injury to persons or out of physical
damage to tangible or real property.
Sec. 5.
Minnesota Statutes 2022, section 337.05, subdivision 1, is amended to read:
Subdivision 1.
Agreements valid.
(a) Except as otherwise provided in paragraph (b),
sections 337.01 to 337.05 do not affect the validity of agreements whereby a promisor agrees
to provide specific insurance coverage for the benefit of others.
(b) A provision that requires a party to provide insurance coverage to one or more other
parties, including third parties, for the negligence or intentional acts or omissions of any of
those other parties, including third parties, is against public policy and is void and
unenforceable.
(c) Paragraph (b) does not affect the validity of a provision that requires a party to provide
or obtain workers' compensation insurance, construction performance or payment bonds,
or project-specific insurance, including, without limitation, builder's risk policies, or owner
or contractor-controlled insurance programs or policies.
(d) Paragraph (b) does not affect the validity of a provision that requires the promisor
to provide or obtain insurance coverage for the promisee's vicarious liability, or liability
imposed by warranty, arising out of the acts or omissions of the promisor.
(e) Paragraph (b) does not apply to building and construction contracts for work within
50 feet of public or private railroads, or railroads regulated by the Federal Railroad
Administration.
Sec. 6. EFFECTIVE DATE.
Sections 1 to 5 are effective the day following final enactment and apply to agreements
entered into on or after that date.