BILL NO A07275A
SAME AS SAME AS S05038
SPONSOR Schimminger
COSPNSR
MLTSPNSR
Add S103-h, Gen Muni L; add S2879-d, Pub Auth L; amd S136-a, St Fin L
Requires contracts between professional design firms and municipal
corporations, state and local authorities, or state departments contain
language concerning indemnification.
BILL NO A07275A
05/08/2013 referred to corporations, authorities and commissions
05/16/2013 amend (t) and recommit to corporations, authorities and commissions
05/16/2013 print number 7275a
BILL NUMBER:A7275A
TITLE OF BILL: An act to amend the general municipal law, the public
authorities law and the state finance law in relation to contracts
with professional design firms
PURPOSE OF THE BILL:
To make indemnification language in contracts with public entities
standard throughout the state and to prevent design professionals from
indemnifying clients for damages that fall outside their professional
standard of care.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends article 5A of the General Municipal Law by adding a
new section 103-h.
Section 2 amends title 4 of article 9 of the Public Authorities Law by
adding a new section 2879d.
Section 3 amends section 136-a of the State Finance Law by adding a
new subdivision 6.
Section 4 sets the effective date.
JUSTIFICATION:
Indemnification is an agreement between two parties for one party to
assume liability in the event of a loss. A consultant may at times
indemnify a client and assume some of the client's legal liabilities
and thereby acts as an insurer for the client. Some public clients in
New York State have been asking consultants to indemnify them for
things that cannot be insured. If a consultant signs an indemnity that
is not limited to just the consultant's negligence they are accepting
liability beyond that required by law and beyond that for which they
are insured.
Professional liability insurance covers consultants against damages
resulting from negligent professional acts, errors or omissions. To
prove negligence, a claimant must establish a professional standard of
care, establish the consultants' duty to adhere to that standard of
care, and establish their failure to do so - and then prove that this
failure proximately resulted in injury or damage to the claimant.
This legislation will make indemnity language standard throughout New
York State for public entities. Professional firms will indemnify and
hold clients harmless from all third party claims, liabilities,
damages and costs arising out of negligent acts, errors and omissions
for which the design consultant is legally liable.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
S T A T E O F N E W Y O R K
________________________________________________________________________
7275--A
2013-2014 Regular Sessions
I N A S S E M B L Y
May 8, 2013
___________
Introduced by M. of A. SCHIMMINGER -- read once and referred to the
Committee on Corporations, Authorities and Commissions -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the general municipal law, the public authorities law
and the state finance law in relation to contracts with professional
design firms
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. The general municipal law is amended by adding a new
2 section 103-h to read as follows:
3 S 103-H. INDEMNIFICATION LANGUAGE IN CONTRACTS. 1. DEFINITIONS. AS
4 USED IN THIS SECTION:
5 A. THE TERM "MUNICIPAL CORPORATION," SHALL MEAN A COUNTY, TOWN, CITY
6 AND VILLAGE.
7 B. THE TERM "PROFESSIONAL FIRM" SHALL BE DEFINED AS ANY INDIVIDUAL OR
8 SOLE PROPRIETORSHIP, PARTNERSHIP, CORPORATION, ASSOCIATION, OR OTHER
9 LEGAL ENTITY PERMITTED BY LAW TO PRACTICE THE PROFESSIONS OF ARCHITEC-
10 TURE, ENGINEERING OR SURVEYING.
11 2. ALL CONTRACTS SUBJECT TO THIS ARTICLE SHALL INCLUDE THE FOLLOWING
12 LANGUAGE:
13 "TO THE FULLEST EXTENT PERMITTED BY LAW, THE PROFESSIONAL FIRM AGREES
14 TO INDEMNIFY AND HOLD THE MUNICIPAL CORPORATION, ITS OFFICERS, DIRECTORS
15 AND EMPLOYEES HARMLESS FROM ALL THIRD PARTY CLAIMS, LIABILITIES, DAMAGES
16 AND COSTS (INCLUDING ALL REASONABLE ATTORNEY'S FEES AND COST OF DEFENSE)
17 TO WHICH THE MUNICIPAL CORPORATION, ITS OFFICERS, DIRECTORS AND EMPLOY-
18 EES MAY BE SUBJECT TO, ARISING OUT OF THE DEATH OR BODILY INJURY TO ANY
19 PERSON OR THE DESTRUCTION OR DAMAGE TO ANY PROPERTY TO THE EXTENT CAUSED
20 BY THE NEGLIGENT ACTS, ERRORS OR OMISSIONS, OR WILLFUL MISCONDUCT OF THE
21 PROFESSIONAL FIRM'S PERFORMANCE OF PROFESSIONAL SERVICES PROVIDED UNDER
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10729-02-3
A. 7275--A 2
1 THIS AGREEMENT AND THOSE OF ITS SUB-CONSULTANTS OR ANYONE FOR WHOM THE
2 PROFESSIONAL FIRM IS LEGALLY LIABLE."
3 "TO THE FULLEST EXTENT PERMITTED BY LAW, THE MUNICIPAL CORPORATION
4 AGREES TO INDEMNIFY AND HOLD THE PROFESSIONAL FIRM HARMLESS FROM ALL
5 THIRD PARTY CLAIMS, LIABILITIES, DAMAGES AND COSTS (INCLUDING ALL
6 REASONABLE ATTORNEY'S FEES AND COST OF DEFENSE) TO THE EXTENT CAUSED BY
7 THE NEGLIGENT ACTS, ERRORS OR OMISSIONS OF THE MUNICIPAL CORPORATION,
8 ITS CONTRACTORS, CONSULTANTS OR ANYONE FOR WHOM THE MUNICIPAL CORPO-
9 RATION IS LEGALLY LIABLE."
10 S 2. The public authorities law is amended by adding a new section
11 2879-d to read as follows:
12 S 2879-D. INDEMNIFICATION LANGUAGE IN CONTRACTS. 1. DEFINITIONS. AS
13 USED IN THIS SECTION:
14 A. THE TERM "STATE AUTHORITY" SHALL MEAN A PUBLIC AUTHORITY OR PUBLIC
15 BENEFIT CORPORATION CREATED BY OR EXISTING UNDER THIS CHAPTER OR ANY
16 OTHER LAW OF THE STATE OF NEW YORK, WITH ONE OR MORE OF ITS MEMBERS
17 APPOINTED BY THE GOVERNOR OR WHO SERVE AS MEMBERS BY VIRTUE OF HOLDING A
18 CIVIL OFFICE OF THE STATE, OTHER THAN AN INTERSTATE OR INTERNATIONAL
19 AUTHORITY OR PUBLIC BENEFIT CORPORATION, INCLUDING SUBSIDIARIES OF SUCH
20 PUBLIC AUTHORITY OR PUBLIC BENEFIT CORPORATION.
21 B. THE TERM "LOCAL AUTHORITY" SHALL MEAN: (A) A PUBLIC AUTHORITY OR
22 PUBLIC BENEFIT CORPORATION CREATED BY OR EXISTING UNDER THIS CHAPTER OR
23 ANY OTHER LAW OF THE STATE OF NEW YORK WHOSE MEMBERS DO NOT HOLD A CIVIL
24 OFFICE OF THE STATE, ARE NOT APPOINTED BY THE GOVERNOR OR ARE APPOINTED
25 BY THE GOVERNOR SPECIFICALLY UPON THE RECOMMENDATION OF THE LOCAL
26 GOVERNMENT OR GOVERNMENTS; (B) A NOT-FOR-PROFIT CORPORATION AFFILIATED
27 WITH, SPONSORED BY, OR CREATED BY A COUNTY, CITY, TOWN OR VILLAGE
28 GOVERNMENT; (C) A LOCAL INDUSTRIAL DEVELOPMENTAL AGENCY OR AUTHORITY OR
29 OTHER LOCAL PUBLIC BENEFIT CORPORATION; (D) AN AFFILIATE OF SUCH LOCAL
30 AUTHORITY; OR (E) A LAND BANK CORPORATION CREATED PURSUANT TO ARTICLE
31 SIXTEEN OF THE NOT-FOR-PROFIT CORPORATION LAW.
32 C. THE TERM "PROFESSIONAL FIRM" SHALL MEAN ANY INDIVIDUAL OR SOLE
33 PROPRIETORSHIP, PARTNERSHIP, CORPORATION, ASSOCIATION, OR OTHER LEGAL
34 ENTITY PERMITTED BY LAW TO PRACTICE THE PROFESSIONS OF ARCHITECTURE,
35 ENGINEERING OR SURVEYING.
36 2. ALL CONTRACTS SUBJECT TO THIS ARTICLE SHALL INCLUDE THE FOLLOWING
37 LANGUAGE:
38 "TO THE FULLEST EXTENT PERMITTED BY LAW, THE PROFESSIONAL FIRM AGREES
39 TO INDEMNIFY AND HOLD THE STATE AND LOCAL AUTHORITY, ITS OFFICERS,
40 DIRECTORS AND EMPLOYEES HARMLESS FROM ALL THIRD PARTY CLAIMS, LIABIL-
41 ITIES, DAMAGES AND COSTS (INCLUDING ALL REASONABLE ATTORNEY'S FEES AND
42 COST OF DEFENSE) TO WHICH THE STATE AND LOCAL AUTHORITY, ITS OFFICERS,
43 DIRECTORS AND EMPLOYEES MAY BE SUBJECT TO, ARISING OUT OF THE DEATH OR
44 BODILY INJURY TO ANY PERSON OR THE DESTRUCTION OR DAMAGE TO ANY PROPERTY
45 TO THE EXTENT CAUSED BY THE NEGLIGENT ACTS, ERRORS OR OMISSIONS, OR
46 WILLFUL MISCONDUCT OF THE PROFESSIONAL FIRM'S PERFORMANCE OF PROFES-
47 SIONAL SERVICES PROVIDED UNDER THIS AGREEMENT AND THOSE OF ITS SUB-CON-
48 SULTANTS OR ANYONE FOR WHOM THE PROFESSIONAL FIRM IS LEGALLY LIABLE."
49 "TO THE FULLEST EXTENT PERMITTED BY LAW, THE STATE AND LOCAL AUTHORITY
50 AGREES TO INDEMNIFY AND HOLD THE PROFESSIONAL FIRM HARMLESS FROM ALL
51 THIRD PARTY CLAIMS, LIABILITIES, DAMAGES AND COSTS (INCLUDING ALL
52 REASONABLE ATTORNEY'S FEES AND COST OF DEFENSE) TO THE EXTENT CAUSED BY
53 THE NEGLIGENT ACTS, ERRORS OR OMISSIONS OF THE STATE AND LOCAL AUTHORI-
54 TY, ITS CONTRACTORS, CONSULTANTS OR ANYONE FOR WHOM THE STATE AND LOCAL
55 AUTHORITY IS LEGALLY LIABLE."
A. 7275--A 3
1 S 3. Section 136-a of the state finance law is amended by adding a new
2 subdivision 6 to read as follows:
3 6. (A) DEFINITIONS. AS USED IN THIS SUBDIVISION:
4 (I) THE TERM "STATE DEPARTMENT" SHALL MEAN THOSE STATE GOVERNMENT
5 DEPARTMENTS, DIVISIONS OR COMMISSIONS EMPOWERED BY THE STATE TO ENTER
6 INTO CONTRACTUAL AGREEMENTS ON BEHALF OF THE STATE OF NEW YORK.
7 (II) THE TERM "PROFESSIONAL FIRM" SHALL BE DEFINED AS ANY INDIVIDUAL
8 OR SOLE PROPRIETORSHIP, PARTNERSHIP, CORPORATION, ASSOCIATION, OR OTHER
9 LEGAL ENTITY PERMITTED BY LAW TO PRACTICE THE PROFESSIONS OF ARCHITEC-
10 TURE, ENGINEERING OR SURVEYING.
11 (B) ALL CONTRACTS SUBJECT TO THIS ARTICLE SHALL INCLUDE THE FOLLOWING
12 LANGUAGE:
13 "TO THE FULLEST EXTENT PERMITTED BY LAW, THE PROFESSIONAL FIRM AGREES
14 TO INDEMNIFY AND HOLD THE STATE DEPARTMENT, ITS OFFICERS, DIRECTORS AND
15 EMPLOYEES HARMLESS FROM ALL THIRD PARTY CLAIMS, LIABILITIES, DAMAGES AND
16 COSTS (INCLUDING ALL REASONABLE ATTORNEY'S FEES AND COST OF DEFENSE) TO
17 WHICH THE STATE DEPARTMENT, ITS OFFICERS, DIRECTORS AND EMPLOYEES MAY BE
18 SUBJECT TO, ARISING OUT OF THE DEATH OR BODILY INJURY TO ANY PERSON OR
19 THE DESTRUCTION OR DAMAGE TO ANY PROPERTY TO THE EXTENT CAUSED BY THE
20 NEGLIGENT ACTS, ERRORS OR OMISSIONS, OR WILLFUL MISCONDUCT OF THE
21 PROFESSIONAL FIRM'S PERFORMANCE OF PROFESSIONAL SERVICES PROVIDED UNDER
22 THIS AGREEMENT AND THOSE OF ITS SUB-CONSULTANTS OR ANY ONE FOR WHOM THE
23 DESIGN CONSULTANT IS LEGALLY LIABLE."
24 "TO THE FULLEST EXTENT PERMITTED BY LAW, THE STATE DEPARTMENT AGREES
25 TO INDEMNIFY AND HOLD THE PROFESSIONAL FIRM HARMLESS FROM ALL THIRD
26 PARTY CLAIMS, LIABILITIES, DAMAGES AND COSTS (INCLUDING ALL REASONABLE
27 ATTORNEY'S FEES AND COST OF DEFENSE) TO THE EXTENT CAUSED BY THE NEGLI-
28 GENT ACTS, ERRORS OR OMISSIONS OF THE STATE DEPARTMENT, ITS CONTRACTORS,
29 CONSULTANTS OR ANYONE FOR WHOM THE STATE DEPARTMENT IS LEGALLY LIABLE."
30 S 4. This act shall take effect immediately.
