Colorado Shifts Financial Responsibility Between Construction Professionals

Effective July 1, 2007, indemnity provisions in construction contracts will no longer be enforced if the provisions protect the indemnified party (“indemnitee”) from the indemnitee’s own negligence or fault. Construction contracts as defined within the new provisions in C.R.S. § 13-21-111.5 (“Civil Liability Cases – Pro Rata Liability of Defendants”) include planning, engineering, design or construction of any kind, including commercial and residential projects, subcontracts, agreement for materials, labor or supervision contracts. The new law does not pertain to lease agreements, projects owned by railroads or projects owned by certain governmental or quasi governmental water and/or sanitary service districts.

Prior to passage of the new provisions, C.R.S. § 13-21-111.5 did not pertain directly to construction professionals, but pertained to actions brought as a result of death or injury to persons or property, where percentages of negligence or fault were at issue. The new Act’s express purposes are to “ensure that every construction business in this state is financially responsible to the tort liability system for losses that a business has caused.” The legislature passed the new Act with the stated goal of promoting competition and safety in the construction industry and benefiting Colorado consumers. In this effort to prevent construction professionals from shifting responsibility for their own negligence to others, the legislature also required that construction professionals obtain liability insurance. The law prevents and declares as “void as against public policy” any provision in a construction contract requiring a party to purchase additional insurance coverage for death, bodily injury or personal property damage arising from acts or omissions that are not caused by the fault of the party providing the additional insurance coverage. The law, however, specifically does not apply to “builder’s risk insurance.

The new law will affect construction professionals and property owners who have previously relied on indemnification agreements in construction contracts and on designations as “additional insureds” on insurance policies providing liability protection. It is not uncommon for construction contracts to contain indemnification language, passing indemnification responsibility and liability to third parties, even though some or all of the fault may rest with the person requesting the indemnification provision. These agreements will no longer be enforceable. In addition, it is common in construction contracts to require that liability insurance coverage include “additional insureds.” These contractual and insurance coverage issues will need to be reevaluated, in light of the new law.

Contact our Denver business law firm for exceptional legal counsel

Since 1977, Robinson Waters & O’Dorisio, P.C. has committed to offering high-quality, personalized legal services for companies of all sizes.

To learn how we can benefit your company, call 303-297-2600 or  Contact Us Online

News & Alerts

RWO Ranked in 2024 Best Law Firms

We are honored to announce RWO has been featured in the 2024 edition of Best Law Firms® nationally in 2 practice areas and Metropolitan in 8 practice areas. The list of 2024 Best Law Firms® includes law firms recognized for professional excellence with persistently...

read more


Attorney Advertising. This website is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.