INDEMNITY The University of Texas System Office of General Counsel Dana Hollingsworth, Attorney

WHAT? DEFINITION OF INDEMNITY: Insurance or other security against possible damage, loss, or hurt.

WHY? Provides Breach-of-Contract Claim in addition to Common Law Cause of Action May Cover Claims that are Excluded by Insurance Policy or are otherwise Not Covered by Insurance May Expand Scope of Indemnitor’s Liability (i.e., liability for acts of unrelated third parties)

WHEN RECEIVING AN INDEMNITY: WHO? MUST obtain coverage for losses caused by the Contractor, its employees and agents Consider requesting coverage for losses caused by subcontractors

WHEN RECEIVING AN INDEMNITY: WHAT? – Make every effort to obtain coverage for losses resulting from (1) negligence and (2) willful misconduct – May settle for coverage of losses resulting from (1) personal injury, (2) death, and (3) damage to tangible personal property

WHEN RECEIVING AN INDEMNITY: WHEN? Losses incurred during the performance of duties and obligations under the contract

EXAMPLE OF GENERAL INDEMNITY CONTRACTOR SHALL INDEMNIFY AND DEFEND UNIVERSITY FROM ALL DAMAGES ARISING OUT OF CONTRACTOR’S PERFORMANCE UNDER THIS AGREEMENT CAUSED BY (1) ANY NEGLIGENT ACT OR OMISSION OR (2) WILLFUL MISCONDUCT OF CONTRACTOR, ITS EMPLOYEES OR ANYONE FOR WHOSE ACTS CONTRACTOR MAY BE LIABLE.

EXAMPLE OF INTELLECTUAL PROPERTY INFRINGEMENT INDEMNITY IN ADDITION, CONTRACTOR SHALL INDEMNIFY AND DEFEND UNIVERSITY FROM ALL CLAIMS ARISING FROM INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER PROPRIETARY INTEREST ARISING OUT OF (1) THE PERFORMANCE OF SERVICES OR THE PROVISION OF GOODS BY CONTRACTOR PURSUANT TO THIS AGREEMENT, OR (2) THE USE BY CONTRACTOR, OR BY UNIVERSITY AT THE DIRECTION OF CONTRACTOR, OF ANY ARTICLE OR MATERIAL

WHEN GIVING AN INDEMNITY: ALWAYS LIMIT “TO THE EXTENT AUTHORIZED BY THE LAWS AND CONSTITUTION OF THE STATE OF TEXAS”

WHEN GIVING AN INDEMNITY: Who? Limit to losses caused only by University and its employees What? Limit to losses caused by (1) negligence and (2) willful misconduct When? Limit to losses incurred during performance of duties and obligations under the contract

WHEN GIVING AN INDEMNITY: NEVER INDEMNIFY A CONTRACTOR FOR THE NEGLIGENCE OF THE CONTRACTOR OR ITS EMPLOYEES, AGENTS OR SUBCONTRACTORS

SAMPLE INDEMNITY A CONTRACTOR MIGHT REQUEST University will hold harmless, defend, and indemnify Contractor, its directors, officers, and employees from any third party claims related to University’s provision of medical care.

ACCEPTABLE REDRAFT To the extent authorized by the laws and Constitution of the State of Texas, University will hold harmless, defend, and indemnify Contractor, its directors, officers, and employees from any third party claims related to University’s negligent provision of medical care.

OFFICE OF GENERAL COUNSEL QUESTIONS? CALL OGC 512/