Explaining Indemnification: What does it mean and how can it affect my case?
By: Robert P. Valletti, Esq.
A typical construction site personal injury matter usually has the following structure (or something similar thereto) with respect to the parties: the injured worker is often the employee of a subcontractor, who was hired by the General Contractor, who was hired by the Owner of the premises. It is very common to find written contracts between the Owners and General Contractors for the work to be completed, but there also is usually a contract between the General Contractor and the Subcontractors they hire to do the electrical work, plumbing, framing, etc. Many times these contracts contain “indemnity” clauses which are provisions that place the burden on another party to defend actions brought by injured workers or to pay damages in the event the worker recover for the injuries sustained.
There are different kinds of indemnity clauses as well. Click to read a brief synopsis on indemnity clauses.
There are multiple effects of these clauses. For example, the indemnity clause could determine who will need to provide counsel for the defendant(s) in the case: if there is an indemnity clause between the owner and the general contractor which states the general contractor’s insurance company will be defending for both parties, then the general contractor’s insurance must provide counsel for both. Alternatively, in the case of indemnity between the general contractor and the subcontractor, if there is an indemnity clause between these two entities (and it has been either agreed to or judicially determined that the employer’s insurance company will have to pay for the damages awarded due to the workers injuries) then ultimately any money from a jury verdict or settlement would come from the employer’s insurance even though they are not directly sued by the construction worker.
Disputes about insurance indemnity coverage happen all the time. Insurance companies attempt to “disclaim” coverage by determining that what occurred up to an including the injured worker’s accident was outside the scope of the insurance contract, thereby vitiating their responsibilities to step in and defend or pay the awarded recovery or settlement. When such a dispute arises, a party may file a “declaratory judgment” or “DJ” action. The purpose of a DJ action is to seek judicial intervention in determining which insurance company will have to defend the general contractor or owner against the claims asserted by the injured worker or to determine if the insurance contract covers the occurrence thereby mandating the insurance company defend or pay. The amount of available insurance can also effect the settlement negotiations, the final settlment amount, or even whether a law suit should be pursued to begin with (which is also dependent upon the level of injury sustained).
If you have been injured while working at a construction site, call the Ginarte Law Firm at 1-888-GINARTE or visit our website at www.Ginarte.com today. You may be entitled to money for your injuries. Put our 150 years of combined experience to work for you today!
