Colorado Subcontractors Seek Indemnity Protection

The Denver Business Journal reports that the Colorado Construction Reform Coalition (CCRC), a group of construction organizations led by the American Subcontractors Association of Colorado (ASAC) and including the Associated Landscape Contractors of Colorado, announced March 23, 2004 the introduction of legislation to reform risk transfer procedures in contracts.

HB 04-1407, sponsored by Reps. Bob Briggs and Bill Crane, R-Jefferson County, and Sen. Abel Tapia, D-Pueblo, would prohibit construction contracts from requiring subcontractors to indemnify contractors for the negligence of others.

According to the CCRC, subcontractors perform about 80 percent of the work in Colorado's $14 billion construction industry. Most construction contracts require subcontractors, those with the least control over construction projects, some say, to assume all the risk on projects with which they are associated. Because insurance is unavailable to cover subcontractors for the negligence of others, their assets are at risk.

A Colorado statute already protects risk transfer rights for the primary contractor in public works projects. Colorado subcontractors are asking for the same right for all parties in construction agreements and in all venues.

"This is a fairness issue," said Reps. Bob Briggs in a statement. "Subcontractors are asking for fair and equitable treatment and the right to assume only the risk they incur, not the risk of others. Our proposed bill keeps accountability with the parties responsible for causing a loss."

"This bill enables subcontractors to be adequately insured at more reasonable costs, preventing the threat of bankruptcy and the threat of jobs being lost," Sen. Tapia added. "It also contributes to improved worksite and public safety while reducing overall construction costs."