Governor Schwarzenegger has now signed SB 972, a new law that clarifies when design professionals will owe a "duty to defend" to public agencies when lawsuits are filed that implicate the services provided by such professionals. The new statute, which will be effective on January 1, 2011, was adopted in response to two court decisions (Crawford v. Weather Shield Mfg., Inc. (2007) 44 Cal.4th 541 and UDC v. CH2M Hill (2010) 181 Cal.App.4th 10), which held that parties could be required to bear the costs of defense under common contractual indemnity provisions, even if they are not ultimately found to have been negligent.
 


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The Governor signed a new law today which limits a public agency’s ability to impose indemnity obligations on design professionals.  AB 573 (Wolk) creates a new Civil Code section 2782.8 which makes indemnity clauses imposed by public agencies on design professionals (including architects, landscape architects, engineers and land surveyors) unenforceable except to the extent that they are based