Florida Indemnification of Surety on Contractor's Bond by Subcontractor is a crucial legal provision that protects the surety company in the event of a contractor's default or failure to perform their obligations on a bonded project. This provision acts as a safeguard for the surety by transferring the responsibility for potential losses incurred onto the subcontractor involved. Under Florida law, there are three types of indemnification agreements that can be established between the surety and the subcontractor. 1. General Indemnity Agreement: This agreement requires the subcontractor to indemnify the surety for any losses, damages, or expenses incurred due to the contractor's failure to perform. The subcontractor agrees to assume the contractor's bond obligations and bear any financial consequences arising from the contractor's default. 2. Partial Indemnity Agreement: In this type of agreement, the subcontractor assumes responsibility for a portion of the surety's losses. The specific percentage or amount of liability is determined through negotiation and is usually proportional to the subcontractor's involvement in the project. 3. Unlimited Indemnity Agreement: An unlimited indemnity agreement holds the subcontractor fully liable for all losses incurred by the surety, regardless of size or scope. This arrangement places a significant burden on the subcontractor, as they bear the entire financial risk resulting from the contractor's non-performance. It is important to note that these indemnification agreements must be in writing and signed by the subcontractor to be enforceable. Additionally, the Florida Statutes state that these agreements should be construed liberally in favor of the surety. By incorporating the appropriate indemnification provisions in construction contracts, the surety company ensures that they are protected from potential losses caused by a defaulting contractor. These agreements provide a legal framework for the surety to seek reimbursement from the subcontractor, reducing their exposure to financial risks associated with non-performing contractors.
Florida Indemnification of Surety on Contractor's Bond by Subcontractor
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By law, Subcontractor shall indemnify, defend (at Subcontractor's sole expense) and hold harmless Contractor, the Owner (if different from Contractor), affiliated companies of Contractor, their partners, joint ventures, representatives, members, designees, officers, directors, shareholders, employees, agents, ...
In construction cases, an indemnity agreement is a promise to safeguard or hold the general contractor harmless against either existing or future loss liability and provides the general contractor with a cause of action to recover against the subcontractor.
With respect to the scope of an indemnity clause, an IC will typically agree to cover any third party claims arising in connection with the death or injury of a person, damage to property, or breach of the agreement as a result of the actions or inactions of the IC or its representatives and employees.
Most subcontracts contain indemnification clauses, also sometimes referred to as ?hold harmless clauses.? Their purpose is to transfer the risk of certain losses or expenses on construction projects from the GC to the subcontractor.
Refund to the Government the said sum of Rs. ???????? and shall otherwise indemnify and keep the Government harmless and all costs incurred in consequence of the claim thereto THEN the above written bond or obligation shall be void and of no effect but otherwise it shall remain in full force, effect and virtue.
Indemnity is the backbone of many surety bonds. In short, indemnity compels a party to compensate another party. Regarding a surety bond, this means that the obligee has the legal right to collect from the surety if the principal of the bond fails to uphold their end of the bond.
A typical indemnity clause in a subcontractor agreement for a construction project may say something like: ?Subcontractor agrees to indemnify and hold harmless Contractor for and against any and all claims arising out of the work Subcontractor performs pursuant to this Agreement.?
What is an indemnity agreement for surety? Generally speaking, the indemnity provision in the agreement grants the surety the broad legal right to recover from the indemnitor whatever it pays on the principal's behalf under the related bonds, as well as those amounts for which it remains liable.