Zen and The Art of Contractual Indemnity

An unfavorable indemnity clause signed today can create a catastrophic risk that will not come to pass until some unknown time in the future. There is an alarming trend of owners (both private and public) including onerous indemnity clauses in their contracts with design professionals, and the scope, breadth, and danger of risk transfer associated with these terms are on the rise. This trend has accelerated over the past 15 years to the point where design professionals know that just about every project will have a contract with some form of an indemnity clause. Every individual who signs contracts must understand the mechanics and impact of these clauses to avoid disproportionate, uninsured, and potentially catastrophic risk exposure.