Indemnification is a contractual obligation where one party agrees to compensate another party for losses, damages, or liabilities arising from specific circumstances. In roofing construction contracts, indemnification clauses require the subcontractor (you) to hold the general contractor and property owner harmless from claims resulting from your work. This means if a third party is injured due to your roofing operations, you agree to cover the GC's legal costs and any damages they are required to pay.
Indemnification clauses in construction contracts come in three forms: limited (you only indemnify for your own negligence), intermediate (you indemnify for your negligence and shared fault, but not the GC's sole negligence), and broad (you indemnify for all claims including the GC's own negligence). Many states, including Texas, have anti-indemnity statutes that void broad form indemnification clauses in construction contracts, limiting enforceable clauses to intermediate or limited form.
Your contractual liability coverage under your CGL policy is what actually pays for indemnification obligations you assume. However, there are limits. Your insurance will not cover indemnification for the other party's sole negligence in most states where that clause would be void anyway. Before signing any roofing subcontract, have your attorney review the indemnification language and your broker confirm that your policy's contractual liability coverage aligns with what you are agreeing to. A mismatch between your contractual obligations and your insurance coverage creates uninsured exposure that could threaten your business.