California Civil Code Section 2782: Indemnity Rules and Exceptions

California Civil Code Section 2782 voids any clause in a construction contract that tries to make one party pay for another party’s sole negligence, willful misconduct, or design defects the other party supplied. The statute, together with its companion sections (2782.05, 2782.1, 2782.2, 2782.5, 2782.6, and 2782.8), sets the outer limits on how contractors, subcontractors, owners, public agencies, and design professionals can shift risk to each other. A clause that crosses those limits is treated as if it were never in the contract.

What Subdivision (a) Prohibits

Subdivision (a) is the foundation. It voids any provision in a construction contract that purports to indemnify one party against liability for death, bodily injury, property damage, or other loss caused by the indemnitee’s sole negligence, willful misconduct, or defects in design furnished by the indemnitee.¹

The word “sole” carries most of the weight. If the party demanding indemnity was the only one at fault, the clause fails outright. If fault is shared, the analysis shifts to the companion sections that address active versus passive negligence. The prohibition also reaches beyond the four corners of the main agreement: it applies to any provision “contained in, collateral to, or affecting” a construction contract, so side letters and ancillary documents get caught too.¹

Subdivision (a) also states the rule does not affect the validity of insurance contracts, workers’ compensation agreements, or coverage issued by an admitted insurer. That carve-out matters, and it comes up again below.

The Three Types of Indemnity Clauses

California courts, starting with MacDonald & Kruse, Inc. v. San Jose Steel Co. (1972), sort construction indemnity clauses into three categories. The statutory reforms were built around these labels, so knowing them makes the rest of the framework readable.

Type I, or broad form, has the indemnitor covering the indemnitee’s losses from both active and passive negligence. This is the most aggressive version and is now void in most California construction contracts.
Type II, or intermediate form, has the indemnitor covering losses arising from its own work, including the indemnitee’s passive negligence, but not the indemnitee’s active negligence.
Type III, or limited form, has the indemnitor covering only losses caused by its own negligence.

Before 2013, Type I clauses were common in private commercial contracts. A general contractor could contractually force a subcontractor to pay for the GC’s own carelessness. SB 474 added Section 2782.05 and effectively killed Type I in most commercial construction. The practical ceiling for subcontractor-to-GC indemnity on commercial jobs is now Type II.

Which Rule Applies to Your Contract

The prohibition tightens or loosens depending on who is on each side of the contract and what kind of project it is. Read the subdivision that matches your situation.

Public Agency Contracts

For contracts entered on or after January 1, 2013, subdivision (b) voids any clause that imposes liability on a contractor, subcontractor, or supplier for a public agency’s active negligence. It also voids any clause that tries to relieve the public agency of responsibility for its own active negligence.¹

Active negligence involves direct participation in the negligent act, such as a public agency employee misoperating heavy equipment. Passive negligence is more indirect, like failing to catch a defect created by someone else. Public agencies can still be indemnified for their passive negligence; they cannot push their own active wrongdoing onto the contractor.

Private Owner Contracts

Subdivision (c) applies to contracts entered on or after January 1, 2013, with a private property owner who is not itself acting as a contractor or material supplier. Indemnity clauses in those contracts are unenforceable to the extent of the owner’s active negligence.¹

“Owner” here includes anyone holding an interest in the property other than a mortgage or security interest. The rule does not apply to a homeowner improving a single-family dwelling; that scenario falls under the residential provisions.

Residential Construction

Subdivision (d), effective for contracts entered after January 1, 2009, targets residential work as defined in California’s Right to Repair Act (Civil Code Section 895 and following). A builder or general contractor cannot require a subcontractor to indemnify them, including for defense costs, for construction defect claims that arise from the builder’s or GC’s own negligence, from the negligence of their other agents or independent contractors, or from work outside the subcontractor’s contractual scope.² The protection cannot be waived by agreement. A subcontractor on a housing project is responsible only for indemnifying defects that trace back to its own work.

Subcontractor Indemnity on Commercial Projects

Section 2782.05 is the provision that reshaped commercial contracting. For contracts entered on or after January 1, 2013, it voids indemnity clauses between subcontractors and general contractors or construction managers to the extent the claims arise from the GC’s active negligence or willful misconduct, or from work outside the subcontractor’s contractual scope.³ Like the residential rule, it cannot be waived or modified by agreement.

Section 2782.05 also lists carve-outs where the prohibition does not reach. The section does not apply to residential contracts already covered by Section 2782(d), direct contracts with public agencies under subdivision (b), direct contracts with private owners under subdivision (c), wrap-up insurance programs, insurance requirements in the contract (including additional insured endorsements) covering the subcontractor’s own acts or omissions, workers’ compensation benefits and governmental immunity protections, surety bond agreements, and breach of contract or warranty claims that exist independently of the indemnity obligation.³

The insurance carve-out surprises people. A GC cannot contractually require a subcontractor to indemnify the GC for the GC’s active negligence, but the GC can still require the subcontractor to name the GC as an additional insured on the subcontractor’s liability policy. The endorsement operates through the insurance policy, not through the indemnity clause, and it survives under a separate legal framework.

Design Professionals

Section 2782.8 gives design professionals the tightest protections in the scheme. For contracts entered on or after January 1, 2018, indemnity clauses in design professional services contracts are unenforceable unless the claims arise from the design professional’s own negligence, recklessness, or willful misconduct. Even where indemnity is enforceable, defense costs charged to the design professional cannot exceed their proportionate percentage of fault.⁴

“Design professional” covers architects, landscape architects, professional engineers, and professional land surveyors, along with business entities offering those services. Solicitation documents such as RFPs and invitations for bids are deemed to incorporate the protections by reference whether or not the contract itself mentions them, and the protection cannot be waived.⁴ Practically, if an architect is found 20 percent at fault on a project with $500,000 in defense costs, the architect’s maximum exposure to those costs is $100,000.

Duty to Defend and Duty to Indemnify Are Not the Same

One of the most consequential distinctions in construction indemnity law is the split between the duty to defend and the duty to indemnify. The California Supreme Court drew a sharp line between them in Crawford v. Weather Shield Mfg. (2008). The duty to defend triggers immediately when a lawsuit is filed alleging claims covered by the indemnity agreement. The duty to indemnify arises only after actual liability is established.

The timing gap has real financial consequences. A subcontractor who signed an indemnity agreement with a defense obligation may have to fund the GC’s legal defense from the moment the complaint is filed, before anyone determines whether the sub was actually negligent. The Crawford court held that the duty to defend “arises immediately upon a proper tender of defense” and “cannot depend on the outcome of that litigation.”

The statutory ceilings apply to defense obligations too. For design professionals under Section 2782.8, defense cost exposure cannot exceed proportionate fault.⁴ For subcontractors under Section 2782.05, the duty to defend follows the same limits as the underlying indemnity obligation, so a sub cannot be required to defend claims arising from the GC’s active negligence or from work outside the sub’s scope.³

Narrow Exceptions

Several companion statutes carve out situations where the baseline prohibitions bend.

Negotiated Allocation of Design Defect Risk

Section 2782.5 lets the parties to a construction contract negotiate and expressly agree on how to allocate, release, limit, or exclude liability for design defects.⁵ The allocation has to be expressly negotiated, not buried in boilerplate.

Plant Inspections by Professional Engineers

Section 2782.2 allows a plant or facility owner to indemnify a professional engineer for the engineer’s own negligence in providing inspection services, but only if the owner meets five strict criteria: it must own the inspected facility, undergo annual independent audits, have a net worth over $10 million, be self-insured for facility-related liability, and the indemnification must exclude the first $250,000 of liability. Willful misconduct is never covered.⁶

Hazardous Materials Work

Section 2782.6 lets a party responsible for contamination indemnify a professional engineer or geologist hired to evaluate or remediate hazardous materials. The indemnity is limited to damages from subterranean contamination or concealed conditions, does not cover the first $250,000 of liability, and excludes gross negligence or willful misconduct by the engineer or geologist.⁷

What Happens When a Clause Violates the Statute

A prohibited indemnity clause is “void and unenforceable” under Section 2782(a). Courts typically sever the offending provision rather than tear up the entire construction contract. The rest of the contract survives. But the fallout goes past losing the paragraph you thought protected you.

If a GC drafted a contract counting on a broad-form indemnity clause that turns out to be void, the GC now carries the financial exposure it assumed would sit with the subcontractor. Courts do not reform the clause into an enforceable version. It is simply gone. And for several of the companion sections, including 2782.05 and 2782.8, the statute specifically provides that the protections “shall not be waived or modified by contractual agreement, act, or omission of the parties,” which forecloses creative drafting workarounds.³

Before signing or drafting a California construction contract, check every indemnity provision against the specific subdivision that fits your project type (public, private commercial, or residential) and your role (GC, subcontractor, owner, or design professional). A clause that is enforceable in one setting can be void in another.

1
California Legislative Information. California Code Civil Code 2782 – Indemnity
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California Legislative Information. California Code CIV 2782 – Indemnity in Construction Contracts
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California Legislative Information. California Code CIV 2782.05 – Subcontractor Indemnity in Construction Contracts
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California Legislative Information. California Code Civil Code 2782.8 – Indemnity in Design Professional Services Contracts
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California Legislative Information. California Code CIV 2782.5 – Negotiated Design Defect Allocation
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California Legislative Information. California Code Civil Code 2782.2 – Indemnity for Professional Engineer Inspection Services
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California Legislative Information. California Code Civil Code 2782.6 – Indemnity for Hazardous Materials Services