HB 0135 2004
1	A bill to be entitled
2	An act relating to construction contracts; amending s.
3	725.06, F.S.; including promises to insure or obtain
4	insurance for certain parties to construction contracts
5	for certain actions as void and unenforceable; providing
6	exceptions; providing for limited liability protection for
7	additional insured coverage under certain agreements or
8	contracts; prohibiting a contractor or subcontractor from
9	withholding payment to certain subcontractors, sub-
10	subcontractors, or materialmen under certain insurance
11	policies under certain circumstances; providing
12	conditions; revising application; providing an effective
13	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), (b),
22	and (c),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 andan architect, engineer, general contractor,
28	subcontractor, sub-subcontractor, or materialman or any
29	combination thereof wherein any party referred to herein
30	promises to have someone named an additional insured under his
31	or her insurance policy, indemnify, defend, or hold harmless
32	another person the other party to the agreement, contract, or
33	party guarantee for liability orfor damages to persons or
34	property caused in whole or in part by any act, omission, or
35	default of the person or party being indemnified indemnitee
36	arising from the contract or its performance, shall be void and
37	unenforceable as against public policy. However, this provision
38	shall not be construed to place limits on indemnity agreements
39	that are only between a general contractor and the owner of real
40	property as long as unlessthe contract contains a monetary
41	limitation on the extent of the indemnification that bears a
42	reasonable commercial relationship to the contract and is part
43	of the project specifications or bid documents, if any.
44	Notwithstanding the foregoing, the monetary limitation on the
45	extent of the indemnification provided to the owner of real
46	property by any party in privity of contract with such owner
47	shall not be less than $1 million per occurrence, unless
48	otherwise agreed by the parties. However, such indemnification
49	shall not include claims of, or damages resulting from, gross
50	negligence, or willful, wanton, or intentional misconduct of the
51	indemnitee or its officers, directors, agents, or employees, or
52	for statutory violations or punitive damages except and to the
53	extent the statutory violation or punitive damages are caused by
54	or result from the negligent acts, omissions, or default of the
55	indemnitor or any of the indemnitor's contractors,
56	subcontractors, sub-subcontractors, materialmen, or agents of
57	any tier or their respective employees.
58	(a)Indemnification provisions in any such agreements,
59	contracts, or guarantees may notrequire that the indemnitor
60	indemnify the indemnitee for damages to persons or property
61	caused in whole or in part by any act, omission, or default of a
62	party other than:
63	1.(a) The indemnitor; or
64	2.(b)Any of the indemnitor's contractors, subcontractors,
65	sub-subcontractors, materialmen, or agents of any tier or their
66	respective employees; or
67	(c) The indemnitee or its officers, directors, agents, or
68	employees. However, such indemnification shall not include
69	claims of, or damages resulting from, gross negligence, or
70	willful, wanton or intentional misconduct of the indemnitee or
71	its officers, directors, agents or employees, or for statutory
72	violation or punitive damages except and to the extent the
73	statutory violation or punitive damages are caused by or result
74	from the acts or omissions of the indemnitor or any of the
75	indemnitor's contractors, subcontractors, sub-subcontractors,
76	materialmen, or agents of any tier or their respective
77	employees.
78	(b)(2)A construction contract for a public agency or in
79	connection with a public agency's project may require a party to
80	that contract to indemnify and hold harmless the other party to
81	the contract, their officers and employees, from liabilities,
82	damages, losses and costs, including, but not limited to,
83	reasonable attorney's fees, to the extent caused by the
84	negligence, recklessness, or intentional wrongful misconduct of
85	the indemnifying party and persons employed or utilized by the
86	indemnifying party in the performance of the construction
87	contract.
88	(c) Any portion of any agreement or contract for or in
89	connection with, or any guarantee of or in connection with, any
90	construction, alteration, repair, or demolition of a building,
91	structure, appurtenance, or appliance, including moving and
92	excavating associated therewith, between an entity regulated by
93	the Florida Public Service Commission and an architect,
94	engineer, general contractor, subcontractor, sub-subcontractor,
95	or materialman or any combination thereof wherein any party
96	referred to herein promises to indemnify or hold harmless the
97	other party to the agreement, contract, or guarantee for
98	liability for damages to persons or property caused in whole or
99	in part by any negligent act, omission, or default of the
100	indemnitee arising from the contract or its performance, shall
101	be void and unenforceable unless the contract contains a
102	monetary limitation on the extent of the indemnification that
103	bears a reasonable commercial relationship to the contract and
104	is part of the project specifications or bid documents, if any.
105	Notwithstanding the foregoing, the monetary limitation on the
106	extent of the indemnification provided to the owner of real
107	property by any party in privity of contract with such owner
108	shall not be less than $1 million per occurrence, unless
109	otherwise agreed to by the parties. Indemnification provisions
110	in any such agreements, contracts, or guarantees may not require
111	that the indemnitor indemnify the indemnitee for damages to
112	persons or property caused in whole or in part by any act,
113	omission, or default of a party other than:
114	1. The indemnitor;
115	2. Any of the indemnitor's contractors, subcontractors,
116	sub-subcontractors, materialmen, or agents of any tier or their
117	respective employees; or
118	3. The indemnitee or its officers, directors, agents, or
119	employees. However, such indemnification shall not include
120	claims of, or damages resulting from, gross negligence or
121	willful, wanton, or intentional misconduct of the indemnitee or
122	its officers, directors, agents, or employees, or for statutory
123	violation or punitive damages except and to the extent the
124	statutory violation or punitive damages are caused by or result
125	from the acts or omissions of the indemnitor or any of the
126	indemnitor's contractors, subcontractors, sub-subcontractors,
127	materialmen, or agents of any tier or their respective
128	employees.
129	(2) If, as part of any agreement or contract for or in
130	connection with, or any guarantee of or in connection with, any
131	construction, alteration, repair, or demolition of a building,
132	structure, appurtenance, or appliance, including moving and
133	excavating associated with such activities, between or among an
134	architect, engineer, general contractor, subcontractor, sub-
135	subcontractor, or materialman or any combination of such
136	persons, a policy of insurance extends certain coverage rights
137	to an additional insured for liability arising out of the acts,
138	errors, or omissions of the named insured, such additional
139	insured coverage shall only provide liability protection to the
140	additional insured for the imputed or vicarious liability
141	imposed on the additional insured as a direct consequence of the
142	negligent acts or omissions of the named insured.
143	(3) If a written contract requires a subcontractor, sub-
144	subcontractor, or materialman to provide a policy of insurance
145	or a certificate of insurance to a general contractor or
146	subcontractor, extending specific coverage rights to an
147	additional insured:
148	(a) The general contractor or subcontractor may at any
149	point prior to the date the subcontractor, sub-subcontractor, or
150	materialman commences work or delivers material to the project,
151	accept or reject the policy as being nonconforming.
152	(b) If not rejected, the general contractor or
153	subcontractor shall be deemed to have accepted the policy.
154	(c) The general contractor or subcontractor shall not use
155	the lack of conforming insurance as a reason to reject work
156	already completed by a subcontractor, sub-subcontractor, or
157	material already supplied by the materialman, or withhold
158	payment to the subcontractor, sub-subcontractor, or materialman
159	for work already completed or material already supplied Except
160	as specifically provided in subsection (2), a construction
161	contract for a public agency or in connection with a public
162	agency's project may not require one party to indemnify, defend,
163	or hold harmless the other party, its employees, officers,
164	directors, or agents from any liability, damage, loss, claim,
165	action, or proceeding, and any such contract provision is void
166	as against public policy of this state.
167	(4) This section does not affect any contracts,
168	agreements, or guarantees entered into before the effective date
169	of this section or any renewals thereof.
170	Section 2. This act shall take effect upon becoming a law.