Anti-Indemnity Statute

  

Categories: Regulations, Tax

Let's break it down. "Indemnity" means not having a legal responsibility for something. "Anti" is the opposite of something. A "statute" is a law. So the anti-indemnity statute prevents the elimination of legal responsibility for particular parties (it feels like there's a double-negative involved there).

Generally, the anti-indemnity statute is used in the construction business. A contractor hires a subcontractor and attempts to get the subcontractor to take on any risk associated with the project, legal responsibility for things like accidents and safety. The contractor wants indemnity against being sued if something goes wrong.

Anti-indemnity statutes prevent this from happening, at least to some extent. Basically, they put a limit on this indemnity and say that some legal responsibility still rests with the original contractor, whatever it says in the contract they signed with someone else.

The scope of these laws vary from state to state. For instance, DC (which we know isn't technically a state, but still) doesn't have any anti-indemnity statutes on the books (as of 2016). Meanwhile, California is one of the few states that prohibits both broad and intermediate indemnity. This according to a report put out by Matthiesen, Wickert & Lehrer.

Related or Semi-related Video

Finance: What is a Safe Harbor?3 Views

00:00

Finance allah shmoop what is a safe harbor provisions All

00:07

right well here's a dangerous harbor and here's a safe

00:11

one Yeah ok so now apply the notion to finance

00:14

land it's not all that different Safe harbor simply means

00:17

that if you follow a basic set of rules you

00:20

can not be found guilty of doing a crime or

00:23

otherwise shady dealings as you live under those safe harbor

00:28

rules Well the most famous safe harbor situation in recent

00:32

times and certainly as it applies to shmoop came with

00:34

the myriad lawsuits of copyright protection as more or less

00:39

all of the valuable content of the world was stolen

00:42

and posted on youtube napster and a whole bunch of

00:45

other peer to peer networks Well caught in the middle

00:47

where the internet service providers comcast tea and dozens of

00:51

others who allowed joe six pack to connect to the

00:54

internet and download you know blurry art films in order

00:58

to sort out the legal situation the government granted safe

01:02

harbor provisions to those internet providers such that if it

01:07

had been deemed that youtube did in fact steal the

01:11

guts of the entertainment industry or provide the gun weaponry

01:14

It's for joe six pack to do so and essentially

01:17

helped bankrupt the music industry And then they lost a

01:20

fifty billion dollar lawsuit Well then on ly google who

01:24

owns youtube would be liable The internet service providers like

01:28

comcast and at and t were granted safe harbour protections

01:33

inside of those lawsuits and they still percolate every now

01:36

and then Again you know today so comcast and att

01:39

and t basically had a safe harbour built around them

01:43

by whole bunch of government lawyers that allowed them to

01:46

continue streaming on the internet and providing internet stuff to

01:50

the masses And had the government not provided that safe

01:53

harbor well it might've made sense for comcast and t

01:56

to just shut down and stop internet service to the

01:59

masses is and then everyone would have lost And you

02:01

know that would have been a bad thing right Right

02:03

Well the bottom line there will always be storms and

02:05

there will always be a need for safe harbors wherever

02:08

you go although you can never be too safe when 00:02:11.163 --> [endTime] there are sharks in the water Yeah

Up Next

Finance: What is Contingent Liability?
4 Views

What is Contingent Liability? Contingent liability refers to a possible liability in the future contingent upon some other event being the trigger....

Finance: What is the Securities Act of 1933?
60 Views

What is the Securities Act of 1933? Signed by President Franklin Roosevelt, the Securities Act of 1933 was the first legislation to regulate the st...

Finance: What is the Free Rider Problem?
10 Views

What is the Free Rider Problem? The free rider problem occurs when people take more than their contributed fair share of a common resource. In the...

Find other enlightening terms in Shmoop Finance Genius Bar(f)