SB 496: Indemnity: design professionals.

Existing law provides, for all contracts, and amendments to contracts, entered into on or after January 1, 2007, with a public agency, as defined, for design professional services, all provisions, clauses, covenants, and agreements contained in, collateral to, or affecting these contracts, that purport to indemnify, including the cost to defend, the public agency by a design professional against liability for claims against the public agency, are unenforceable, except for claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the design professional.

Existing law provides, with respect to contracts and amendments to contracts entered into on or after January 1, 2011, with a public agency, as defined, for design professional services, that all provisions, clauses, covenants, and agreements contained in, collateral to, or affecting these contracts or amendments to contracts that purport to require the design professional to defend the public agency under an indemnity agreement, including the duty and the cost to defend, are unenforceable, except for claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the design professional. Existing law provides that all contracts and all solicitation documents between a public agency and a design professional are deemed to incorporate these provisions by reference.

This bill would instead make these provisions applicable to all contracts for design professional services entered into on or after January 1, 2018. The bill would prohibit the cost to defend charged to the design professional from exceeding the design professionals proportionate percentage of fault, except that in the event that one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, the bill would require the design professional to meet and confer with other parties regarding unpaid defense costs. The bill would also provide for certain exemptions to these provisions.