Since 2012, Texas construction contracts can no longer force a subcontractor to indemnify a general contractor for the GC's own negligence — and they can't use an additional-insured endorsement to do indirectly what the indemnity clause can't do directly. Insurance Code §151.102 voids both. Knowing what the Act bars, what survives, and the fair-notice rule is the difference between a risk-transfer clause that works and one a court throws out.
General Liability · Texas · Regulated by TDI · General Liability in Texas
The Texas Anti-Indemnity Act, Insurance Code Chapter 151 (§151.102), voids any provision in a construction contract that requires one party to indemnify or hold harmless another for the other party's own negligence or fault. It also voids additional-insured requirements to the same extent, so a GC can't use an AI endorsement to capture coverage for its own negligence that the indemnity clause is barred from providing. What survives is indemnity and AI coverage for the indemnitor's (the sub's) own negligence. The Act applies to most commercial construction contracts but carves out single-family/duplex residential work, certain public-works projects, and a few other categories — and broad indemnity clauses must still satisfy Texas's separate "fair notice" requirements to be enforceable at all.
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For decades, Texas construction contracts routinely shifted all risk downhill: a general contractor's subcontract would require the sub to indemnify the GC for any injury or damage on the project — even when the GC itself was negligent. In 2011 the Texas Legislature ended that practice with the Texas Anti-Indemnity Act, codified at Insurance Code Chapter 151, effective for construction contracts entered into on or after January 1, 2012.
The core rule is §151.102: a provision in a construction contract is void and unenforceable to the extent it requires one party (the indemnitor — usually the sub) to indemnify or hold harmless another party (the indemnitee — usually the GC or owner) against a claim caused by the negligence or fault of the indemnitee, its agents, or anyone other than the indemnitor. In plain terms: you can't make a sub pay for the GC's own negligence.
Texas joined the large group of states with anti-indemnity statutes, but its version is notable for explicitly closing the "additional insured" workaround (next section) — which is what makes §151.102 bite on the insurance side, not just the contract side.
Before 2012, even where a state limited indemnity clauses, GCs had a workaround: instead of (or alongside) the indemnity clause, the contract required the sub to name the GC as an additional insured on the sub's general-liability policy. That AI status could pick up the GC's own negligence as an insured under the sub's policy — accomplishing through insurance exactly what the indemnity clause was barred from doing.
The Texas Anti-Indemnity Act explicitly shuts that door. Under §151.102 and §151.104, an additional-insured provision in a construction contract is void to the same extent as the indemnity provision — i.e., void to the extent it requires coverage for the indemnitee's (GC's) own negligence or fault. A GC can still require the sub to add it as an additional insured, but only for liability arising out of the sub's operations or fault, not the GC's.
This is the practical heart of the Act for insurance professionals: it means a Texas additional-insured endorsement on a sub's policy can no longer be relied on to cover the GC's own negligence. The coverage tracks the sub's fault. So both the contract clause and the insurance behind it move in lockstep — neither can transfer the GC's own negligence to the sub.
The Act doesn't outlaw risk transfer — it outlaws transferring the indemnitee's fault. What remains fully enforceable:
So the right way to read §151.102 is not "indemnity is dead in Texas" — it's "indemnity and AI now stop at the sub's fault." Clauses are redrafted to require the sub to indemnify and insure the GC "to the extent caused by" the sub's negligence, and those clauses hold up.
Chapter 151 doesn't apply to every construction agreement. The notable exclusions (§151.105 and related provisions) include:
The big practical one is the residential carve-out: a custom-home or duplex builder's contract isn't governed by §151.102 the way a commercial subcontract is, so the indemnity analysis on a single-family job differs from a commercial one. Because the exact boundaries of these exclusions are technical, confirm whether a specific project falls inside or outside Chapter 151 before relying on a broad clause. Don't assume the Act applies — or doesn't — without checking the project type against §151.105.
Even where Chapter 151 permits an indemnity clause, Texas common law imposes a separate, older set of "fair notice" requirements that a broad indemnity clause must satisfy to be enforceable at all. These come from Texas Supreme Court doctrine (the Ethyl / Dresser line of cases), not from §151.102, but they operate alongside it:
So a Texas contractor faces a two-layer test: (1) does Chapter 151 allow this transfer at all (it won't, to the extent it reaches the indemnitee's own fault), and (2) if some negligence-shifting is allowed and intended, is it drafted expressly and conspicuously enough to satisfy fair notice? A clause can clear the Act and still fail fair notice, or vice versa. Both have to be satisfied.
The Anti-Indemnity Act reshaped how Texas contractors transfer risk, and it has concrete insurance consequences:
Acolite is a licensed brokerage, not an insurer. We place Texas contractor general liability and structure additional-insured coverage (CG 20 10 / CG 20 37) so a sub's program lines up with what §151.102 actually allows — coverage for the sub's operations — and we help GCs confirm their own primary and excess limits aren't quietly relying on a sub's AI status the Act has voided. Coverage is subject to underwriting. This page is informational only and isn't legal advice; have construction counsel review your indemnity and insurance clauses for Chapter 151 and fair-notice compliance.
These are the gaps that competitors gloss over and that cause denied claims or rejected certificates.
§151.102 voids additional-insured requirements to the extent they cover the indemnitee's own fault. Post-2012, a sub's AI endorsement responds only for liability arising out of the sub's operations — a GC relying on it to backstop its own negligence has a coverage gap and should carry its own limits.
A broad clause making the sub indemnify the GC for any claim is unenforceable to the extent the claim is caused by the GC's own negligence. Redraft to "to the extent caused by" the sub's fault — comparative-fault indemnity survives; the all-claims version doesn't.
Separate from the Act, Texas common law requires negligence-shifting indemnity to be stated expressly (the express-negligence doctrine) and conspicuously (bold/capitalized). A clause buried in fine print can fail even where the Act would allow it. Both tests must be met.
Single-family, townhouse, and duplex projects — and certain public-works and utility agreements — fall outside Chapter 151, so the broad-indemnity analysis differs. Confirm the project type against §151.105 before assuming the Act applies or doesn't.
Because indemnity and AI both stop at the sub's fault, structure the sub's GL with CG 20 10 (ongoing) + CG 20 37 (completed ops) AI for the sub's operations, and have the GC carry its own primary/excess for its own negligence — don't assume the sub's policy fills that gap.
Chapter 151 governs construction contracts entered into on or after January 1, 2012. Older contracts may carry pre-Act broad indemnity language; confirm the contract date before assessing whether a clause is governed by §151.102.
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| Factor | Impact | Detail |
|---|---|---|
| GC carrying its own limits instead of leaning on sub AI | Major | Because a sub's AI endorsement can't cover the GC's own negligence in Texas, a GC needs adequate primary and excess GL of its own. Buying real limits costs more than assuming the sub's policy backstops you — but the AI gap the Act creates makes those limits necessary. |
| Trade hazard / class code | Major | General-liability rates are driven by trade and class code; higher-hazard construction operations carry higher rates regardless of how indemnity is structured, and that's the base the AI/indemnity coverage rides on. |
| Additional-insured endorsements (CG 20 10 / CG 20 37) | Moderate | Adding ongoing- and completed-operations AI for a GC on a sub's policy can affect pricing and availability. These forms tie coverage to the sub's operations, which is exactly the transfer the Act still allows. |
| Project type (commercial vs. residential carve-out) | Moderate | Residential (single-family/duplex) work sits outside Chapter 151, so the contract risk-transfer — and the insurance structured around it — differs from commercial work, which can change program design and cost. |
| Limits and excess/umbrella tower | Moderate | Since the GC must insure its own negligence rather than push it to the sub, higher primary limits and an excess/umbrella tower add premium — particularly on large commercial jobs with high contractual limit requirements. |
| Payroll / receipts (GL exposure base) | Moderate | Contractor GL is rated on payroll or receipts depending on class; more exposure means more premium, independent of the indemnity structure. |
It's Insurance Code Chapter 151 (§151.102), effective for construction contracts on or after January 1, 2012. It voids any provision requiring one party to indemnify or hold harmless another for that other party's own negligence or fault — and voids additional-insured requirements to the same extent.
No. §151.102 makes any indemnity or hold-harmless provision void to the extent it covers the GC's (indemnitee's) own negligence or fault. What's enforceable is indemnity for the sub's own negligence — typically drafted "to the extent caused by" the sub's fault.
Yes. The Act voids additional-insured requirements to the same extent as the indemnity provision, so a sub's AI endorsement can't be used to cover the GC's own negligence. A GC can still be an AI for liability arising out of the sub's operations, but not for the GC's own fault.
It's a separate common-law requirement: an indemnity clause that shifts a party's own negligence must be stated expressly and specifically (the express-negligence doctrine) and conspicuously (bold or capitalized so it's noticeable). A clause can satisfy the Anti-Indemnity Act and still fail fair notice if it isn't drafted this way.
Indemnity for the indemnitor's (the sub's) own negligence or fault. Post-2012 Texas clauses require the sub to indemnify and insure the GC "to the extent caused by" the sub's negligence — that comparative-fault transfer survives. Only the part reaching the GC's own fault is void.
Generally no for single-family houses, townhouses, and duplexes — those are carved out of Chapter 151 (§151.105), so traditional broad indemnity can still appear. Certain public-works and utility/railroad agreements are also excepted. Confirm the project type before relying on a broad clause.
Not for its own negligence. Because the Act voids AI coverage for the indemnitee's own fault, a Texas GC's AI status on a sub's policy responds only for liability arising from the sub's operations. The GC should carry its own adequate primary and excess GL rather than assume the sub's policy fills that gap.
It applies to construction contracts entered into on or after January 1, 2012. Contracts predating that date may still contain pre-Act broad indemnity language, so the contract date matters when assessing whether §151.102 governs a clause.
Limit it to the sub's own negligence — "to the extent caused by" the indemnitor's fault — and, where any negligence-shifting is intended and allowed, draft it expressly and conspicuously (bold/capitalized) to satisfy fair notice. Pair it with CG 20 10 / CG 20 37 additional-insured forms tied to the sub's operations. Have counsel review the wording.
Acolite is a licensed brokerage, not an insurer. We place Texas contractor general liability and structure additional-insured coverage (CG 20 10 / CG 20 37) so a sub's program matches what §151.102 allows — coverage for the sub's operations — and help GCs confirm their own primary/excess limits aren't relying on AI coverage the Act voided. Coverage is subject to underwriting; we're not a law firm.
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