Adjusters: Why the Indemnification Clause Should Stay Top of Mind.

The article focuses on the critical role of indemnification clauses in construction claims and the common challenges adjusters face in properly evaluating them. Indemnification clauses are contractual promises where one party agrees to hold another harmless and often includes defense obligations, but their enforceability varies by state law, especially due to anti-indemnity statutes like Texas’s Anti-Indemnity Act. Failure to timely identify and analyze these clauses can lead to carriers improperly absorbing defense costs and disputes over reimbursement, emphasizing the need for early recognition, thorough evaluation, and involvement of coverage counsel on high-exposure files. The article underscores that effective management of indemnification clauses requires coordinated efforts among independent adjusters, examiners, and legal counsel to prevent costly errors in construction liability claims. [Extracted from the article]