Indemnity is compensation given to make another whole from a loss
already sustained. Contractual indemnity, on the other hand, is that
which is voluntarily given as security or protection to prevent his or
her suffering damage. But this contractually created indemnity has
potential implications on another important form of contractual
indemnity: the liability insurance policy.
The ultimate question is whether the indemnity agreement is enforceable
and what impact it has on the insurance obligation. A uniform format is
followed in each of the state summaries:
- Section 1 - General Rules of Contractual Indemnity: A preliminary
discussion of indemnity agreements.
- Section 2 - Exceptions to General Rules of Contractual Indemnity:
Identifies statutory or judicially created exceptions to the general
rules applicable to contracts of indemnity.
- Section 3 - Indemnity Agreements as Insured Contracts: Addresses
the extent to which an insured's agreement to indemnify a third party
constitutes an "insured contract" under the state law, negating the
exclusion for contractually assumed liability to the extent of the
indemnity.
- Section 4 - Operation of an Agreement to Indemnify Referring to or
Requiring Insurance: Addresses the interplay between an insured's
agreement to indemnify a third party, which is combined with a
reference to first- or third-party insurance.
While this is principally a survey of the intersection between general
liability insurance and an insured's separate agreement to indemnify,
the discussion of relevant case law is not always limited to general
liability policies where discussion and analysis of other coverage is
relevant to the subject matter of this survey.
