Quick answer: The Texas Anti-Indemnity Act is Subchapter C of Chapter 151 of the Texas Insurance Code, and it took effect January 1, 2012. It voids any clause in a construction contract that makes one party indemnify or defend another against a claim caused by that other party's own negligence, fault, statutory violation, or breach of contract, and section 151.104 voids additional insured requirements and endorsements to the same extent. The big exception, section 151.103, still allows indemnity for bodily injury or death claims brought by the indemnitor's own employees or those of its subcontractors of any tier. Single-family homes, townhouses, duplexes, municipal public works and several other agreements are carved out, and section 151.151 says the Act cannot be waived by contract. In practice, a Texas subcontractor can still be asked to cover its own share of fault, so the insurance and endorsements it carries should be built to match what the contract can lawfully require.
What the Texas Anti-Indemnity Act Says
The Act was passed in 2011 as House Bill 2093. Every section of Subchapter C carries the same history note: added by Acts 2011, 82nd Legislature, H.B. 2093, effective January 1, 2012. Law firm alerts from the time, such as Thompson Coe's June 2011 summary, describe it as applying to construction contracts entered into on or after that date. A 2017 Cooper & Scully symposium paper adds an important detail: the trigger is the original contract with the owner. A subcontract you sign in 2026 on a project whose prime contract predates 2012 may still fall under the old law.
Section 151.102: the core prohibition
Section 151.102 makes a provision in a construction contract, or in any agreement collateral to or affecting one, void and unenforceable as against public policy to the extent it requires the indemnitor to indemnify, hold harmless, or defend a party against a claim caused by the indemnitee's own negligence or fault, its breach or violation of a statute, ordinance, regulation, standard or rule, or its breach of contract. The same applies to the indemnitee's agents, employees, and any third party under its control or supervision, other than the indemnitor itself or the indemnitor's own agents, employees and subcontractors of any tier.
Three words in that section do most of the work. "Defend" means a duty to pay the general contractor's lawyers is covered, not just a duty to pay a judgment. "Fault" and "breach of contract" mean the Act is broader than negligence. And "to the extent" means the clause is not thrown out entirely. It is cut back so that you answer for your own share and your own people, not for the party upstream of you.
What counts as a construction contract
The definition in section 151.001 is wide. It covers a contract, subcontract, agreement, or a performance bond securing one, made by an owner, architect, engineer, contractor, construction manager, subcontractor, supplier, or material or equipment lessor. The work can be design, construction, alteration, renovation, remodeling, repair or maintenance of an improvement to public or private real property, and it includes moving, demolition and excavation. Equipment rentals and supply agreements are in scope. In the crane case discussed below, the federal court treated a bare crane rental agreement as subject to the Act.
When it applies
Section 151.101 applies the subchapter to a construction contract for a project where the indemnitor is provided, or buys, insurance subject to Chapter 151 or Title 10 of the Insurance Code, whether that insurance is bought before or after the contract is signed. The Cooper & Scully paper notes that Title 10 is the property and casualty title that includes standard commercial general liability and workers' comp. In plain terms, if you carry ordinary GL in Texas, assume the Act applies to your Texas construction contracts.
Additional Insured Coverage Under Section 151.104
Before 2012, a general contractor that could not get indemnity for its own negligence could often get the same result by being named as an additional insured on the sub's GL policy. Texas closed that route. Section 151.104(a) voids a contract provision that requires the purchase of additional insured coverage, and any endorsement or policy provision that provides it, to the extent the coverage reaches what an indemnity agreement could not. McGuireWoods' 2011 alert noted that Texas is one of only a handful of states that restrict both indemnity and additional insured requirements.
Note the wording: the Act reaches the policy itself, not only the contract. An endorsement on your policy that would cover the general contractor's sole or concurrent negligence is void to that extent, even if both parties wanted it. For the basics of how AI endorsements work, see the additional insured problem. This section covers only what changes in Texas.
How ISO's 2013 AI forms fit the Texas rule
The common ongoing-operations form, ISO CG 20 10 04 13, covers the additional insured only for injury or damage caused, in whole or in part, by your acts or omissions, or those of people acting on your behalf, in performing your ongoing operations. It then adds two limits: the coverage applies only to the extent permitted by law, and it will not be broader than the contract requires. It also caps the AI's limit at the lesser of what the contract requires and your declared limits.
Coverage that responds only where your work caused the loss, and only as far as the law permits, fits Section 151.104. Blanket and carrier-specific AI forms vary, so the endorsement on your policy is what counts, not the box ticked on a certificate.
Primary and non-contributory wording
Texas subcontracts routinely ask for AI coverage on a primary and non-contributory basis, meaning your policy pays first for the additional insured without the GC's own insurer sharing the loss. That wording decides the order in which policies respond. It does not create coverage the Act has voided. If the GC's share of a loss is its own negligence, a primary and non-contributory endorsement on your policy does not make your carrier pay that share. Ask your broker to confirm that the primary wording on your policy is tied to coverage the contract requires, and that your umbrella follows it; see follow-form umbrellas.
What a federal court did with AI status in 2022
In Knife River Corp.-South, a March 2022 Northern District of Texas decision summarized by Phelps Dunbar, a driver hurt in a highway work zone sued the general contractor, which then sought AI coverage under a signage subcontractor's policies. The court held the Act's AI provision applies only to the extent the additional insured seeks coverage for its own negligence. Because the petition alleged the sub's negligence and the policies covered only injury resulting from the sub's own negligence, the Act did not void the coverage. Well-drafted AI coverage tied to your own work survives in Texas.
The Exceptions: Employee Injuries and Section 151.105
The employee injury exception
Under section 151.103, section 151.102 does not apply to a provision requiring a person to indemnify, hold harmless or defend another party against a claim for the bodily injury or death of an employee of the indemnitor, its agent, or its subcontractor of any tier. This is the scenario upstream parties worry about most: your injured worker sues the general contractor, often called a third-party-over action. In that case, a Texas subcontract can still require you to defend and indemnify the GC even if the GC was negligent, and the AI coverage tied to it can respond too.
There is a catch on both sides. Clauses that rely on an exception still have to satisfy Texas's fair notice rules. The Cooper & Scully paper explains that an indemnity provision covering the indemnitee's own negligence must say so in specific terms and must be conspicuous, and that those requirements continue to apply where the Act does not void the clause, such as employee injury claims and residential work. That is a drafting question for counsel, but it decides whether the exception you are relying on actually works.
Who counts as an employee: the 2022 crane case
In Maxim Crane Works, L.P., decided March 4, 2022, the Texas Supreme Court answered a certified question from the Fifth Circuit. A subcontractor had rented a crane and agreed to name the crane company as an additional insured with at least $2 million per occurrence. The boom collapsed and injured an employee of the general contractor. A jury found the subcontractor 90 percent and the crane company 10 percent responsible, and the crane company settled and sought AI coverage under the sub's policy. The sub's insurer denied it under the Act.
The crane company argued that because the GC's wrap-up made the injured worker and the subcontractor statutory co-employees for workers' comp purposes, the employee exception applied. The court said no. "Employee" in section 151.103 has its ordinary meaning, and a deemed relationship under Labor Code section 406.123 applies only for workers' comp purposes. The worker was the GC's, not the subcontractor's, so AI coverage for the crane company's own negligence was void. If you rent equipment into a Texas job or hold AI status, do not assume coverage for injuries to another contractor's workers.
Projects and agreements the Act does not reach
Section 151.105 lists what the subchapter does not affect:
| Excluded from the Act | What it means for you |
|---|---|
| Insurance policies, including wrap-up policies, except as Section 151.104 provides | AI provisions are still cut back |
| Breach of contract or warranty claims independent of an indemnity obligation | You still answer for your own defective work |
| Indemnity in loan and financing documents (other than construction contracts with the owner's lender) | Lender paperwork is outside the Act |
| General agreements of indemnity required by sureties | Your bonding company's indemnity still binds you |
| Texas workers' compensation benefits and protections | Exclusive remedy is unaffected |
| Governmental immunity protections | Public entities keep their immunity |
| Agreements under Civil Practice and Remedies Code Chapter 127 | Oilfield agreements follow their own law |
| Certain railroad access licenses | Right-of-entry indemnities can be enforced |
| Indemnity for copyright infringement claims | Outside the Act |
| Single-family houses, townhouses, duplexes and directly related land development | Broad indemnity may be enforceable, subject to fair notice |
| Public works projects of a municipality | City jobs are outside the Act |
| Joint defense agreements made after a claim | Allowed |
Two items trip people up. The residential carve-out covers single-family houses, townhouses and duplexes, and Cooper & Scully notes that legislative history suggests apartments and condominiums are not included. And the public works carve-out is limited to municipal projects. If you work across building types, a contract review needs to know which project the subcontract is for.
What the Contract Asks For vs. What Texas Law Allows
Most Texas subcontracts still carry forms written for many states. Here is how typical requests line up with Chapter 151 on a commercial project where the Act applies. The right column is a starting point for your lawyer and broker, not legal advice.
| What the contract asks for | What Texas law allows | Insurance to line up |
|---|---|---|
| Indemnify the GC and owner for all claims arising out of your work, regardless of fault (broad form) | Void to the extent of the GC's or owner's own fault; enforceable for your share | GL contractual liability for insured contracts |
| Indemnify for everything except the GC's sole negligence (intermediate form) | Void to the extent of the GC's concurrent negligence | Same; no contractual liability limitation endorsement |
| Defend the GC from day one of any claim | Void to the extent the claim is caused by the GC's fault, judged mainly on the pleadings | AI defense for claims alleging your work |
| Indemnify for injuries to your own employees, even if the GC was negligent | Allowed under Section 151.103, if the clause meets fair notice | Contractual liability, employer's liability and umbrella limits |
| Name the GC and owner as additional insureds for their own negligence | Void to that extent under Section 151.104 | AI limited to injury caused in whole or in part by your work |
| AI coverage on a primary and non-contributory basis | Not addressed by the Act; cannot revive voided coverage | Primary and non-contributory endorsement, umbrella that follows it |
| Waiver of subrogation on GL, auto, umbrella and comp | Not mentioned in Chapter 151 | Waiver endorsements on each line named |
| A clause waiving the Act | Ineffective under Section 151.151 | Flag it to counsel |
| Wrap-up enrollment plus your own AI obligations | Wrap-up named insured listings are outside Section 151.104; Chapter 151 adds disclosure rules | Your own policy for off-site and excluded work |
Cooper & Scully describe the Act as voiding broad form and intermediate form indemnity where it applies, leaving limited form, indemnity for your own fault, as the standard Texas commercial clause. The contractual liability exclusion guide explains how your GL picks it up.
The Defense Duty and the Signature Case
Most indemnity fights start with the defense, because lawyers' bills arrive long before anyone decides fault. In Signature Industrial Services v. International Paper, decided January 14, 2022, the Texas Supreme Court applied Section 151.102 to a contractor's indemnity clause. The owner wanted the contractor to pay the cost of defending a suit that alleged the owner's own fraud and breach of contract. The court held the Act made the clause ineffective for that suit.
The court also set a practical test. Section 151.102 does not ask who was truly at fault for the injuries. It asks whether the claim for which indemnity is sought was caused by the fault or breach of contract of the indemnitee, and absent fraud or another unusual circumstance, the pleadings will generally be enough to decide that. For a subcontractor, that means a defense demand on a lawsuit that only alleges the GC's own failures is usually one you can push back on, while a suit that alleges your work is one where your AI coverage and indemnity may be triggered.
When a tender arrives, a good broker reports it to your carrier promptly with the contract and AI endorsement, so the defense question sits with the carrier and your lawyer, not with you alone.
Waivers of Subrogation and Wrap-Ups in Texas
Waivers of subrogation
Chapter 151's text addresses indemnity, additional insured coverage and consolidated insurance programs. It does not mention waivers of subrogation. Texas subcontracts still ask for them on GL, auto, umbrella and workers' comp, and your carrier has to agree to each one by endorsement. Whether a particular waiver is enforceable is a question for counsel. The insurance point is simpler: if the contract requires a waiver and your policy does not have the endorsement, you may be in breach the day you start work. See the waiver of subrogation problem for how those endorsements work.
Texas rules for wrap-up programs
Chapter 151 is titled for consolidated insurance programs, and Texas gives enrolled contractors specific rights that most wrap-up guides skip:
- Three years of completed operations. A wrap-up that provides GL must provide completed operations coverage for a policy period of at least three years, under section 151.051.
- Disclosure 10 days before you sign. Under section 151.003, added effective 2016, the principal must give you program contacts, eligibility, the project site, a summary of coverages with limits and sublimits, how to exclude insurance costs from your bid, and any deductible charge-back method, no later than the 10th day before the contract.
- A right to opt out. If that information is late, section 151.006 lets you elect not to enroll. You then buy your own coverage for the project, and the principal or contractor must compensate you for its actual cost.
- A copy of the policy. You can request the full wrap-up policy in writing under section 151.007, and failing to provide it by the later of 75 days after the request or 90 days after your work starts is a material breach under section 151.008.
- AI listings in the wrap-up. Section 151.104(b) says the AI restriction does not apply to a wrap-up policy provision that lists, adds or deletes named insureds.
Wrap-ups do not cover everything. The crane case turned partly on an equipment vendor that was not enrolled. For the subcontractor side of enrollment, credits and completed operations risk, see OCIP vs CCIP.
What Subcontractors and GCs Should Do Before Signing in Texas
If you are a subcontractor
- Check the project type and prime contract date. Residential and municipal work, and projects whose owner contract predates 2012, may fall outside the Act.
- Have counsel review the indemnity clause, including whether any employee injury indemnity meets fair notice rules.
- Send the insurance exhibit to your broker before you sign, not after. Limits, AI forms, primary wording and waivers are all endorsements that take time to add.
- Confirm your GL covers the indemnity you can lawfully give, with no contractual liability limitation endorsement.
- Match your AI endorsement to Texas law. Coverage for injury caused in whole or in part by your work, ongoing and completed operations as the contract requires.
- Track every certificate request against the contract, and run new contracts through the COI checker before the GC's compliance team does. Our certificate of insurance guide covers what a certificate can and cannot show.
If you are a general contractor
The Act cuts both ways. If your subcontract forms still demand broad form indemnity, a Texas court will cut them back, so your own GL and umbrella must carry your share of every loss. General contractors should flow owner requirements down consistently, and if you pass a wrap-up down, Chapter 151's disclosure, opt-out and three-year completed operations rules apply to you.
How Aiden Risk Solves Each of These Problems
Aiden Risk is an AI-native independent commercial insurance broker licensed in Texas. We pair an AI risk engine built for commercial insurance, which analyzes 140+ signals about a business, with a licensed broker on every account. We do not give legal advice; your lawyer handles the contract. We make sure your insurance matches it.
| The problem | How Aiden Risk solves it |
|---|---|
| Broad form indemnity that Texas law cuts back | Your licensed broker reviews the insurance and indemnity clauses with you before you sign, flags terms for your lawyer, and confirms your GL covers the indemnity you can lawfully give. |
| AI endorsements that do not match the contract or Section 151.104 | Your broker reviews the actual AI forms on your policy and negotiates with carriers for endorsements that match the contract. |
| Primary and non-contributory wording missing, or not followed by the umbrella | Your broker checks primary wording on the GL and umbrella and requests the endorsements the contract names. |
| Waivers of subrogation required on several lines | Your broker confirms waiver endorsements on each line the contract requires. |
| Employee injury indemnity and third-party-over exposure | Your broker sizes contractual liability, employer's liability and umbrella limits to it, with a coverage gap analysis before binding. |
| Relying on someone else's AI status for equipment rentals | Your broker reviews rental and supply agreements alongside your own policy. |
| Certificates that do not match the contract | The free COI checker grades a certificate against the contract from your answers and flags gaps; a licensed specialist then issues a corrected certificate, often the same day. |
| Wrap-up enrollments and opt-outs | Your broker reviews the Chapter 151 disclosures with you and prices your own coverage if you opt out. |
| New Texas jobs that change requirements mid-year | Our AI monitors your risk year-round, and a licensed broker acts on every change it flags, such as a new contract or a higher limit requirement. |
| Overpaying for the coverage the contract requires | We shop 100+ carriers, including admitted and surplus lines carriers, and most straightforward businesses are placed in as little as 48 hours after a 5-minute intake. |
Aiden Risk charges no fee to work with it, with no platform fee or subscription; it is paid through standard carrier commissions. We place contractor general liability and the rest of a contractor insurance program in Texas and 15 other states, listed on our licenses page.
Key Takeaways
- The Texas Anti-Indemnity Act, Insurance Code Chapter 151, voids indemnity and defense obligations for the other party's own negligence, fault, statutory violations or breach of contract, for owner contracts entered into on or after January 1, 2012.
- Section 151.104 applies the same limit to additional insured requirements and to the endorsements themselves, and Section 151.151 says the Act cannot be waived.
- Indemnity for injuries to your own employees and your sub-tiers' employees is still allowed, and the Texas Supreme Court held in 2022 that "employee" means the indemnitor's actual employee.
- Residential single-family, townhouse and duplex work, municipal public works, surety indemnity and several other agreements are excluded under Section 151.105.
- Primary and non-contributory wording and waivers of subrogation are not addressed by the Act, so they still need to be on your policy by endorsement when the contract asks.
- Aiden Risk's licensed broker reviews your Texas subcontract's insurance and indemnity terms against your policy, gets the AI, waiver and primary endorsements in place, issues matching certificates, and our AI flags new contracts all year.
FAQs
What is the Texas Anti-Indemnity Act?
It is Subchapter C of Chapter 151 of the Texas Insurance Code, passed as House Bill 2093 in 2011 and effective January 1, 2012. It voids construction contract clauses that require one party to indemnify, hold harmless or defend another against claims caused by that other party's own negligence, fault or breach, and limits additional insured coverage the same way.
Does the Texas Anti-Indemnity Act apply to additional insured requirements?
Yes. Section 151.104 voids contract provisions requiring additional insured coverage, and the endorsements providing it, to the extent the coverage reaches what an indemnity agreement could not. Coverage for injury caused by your own work remains enforceable, as a federal court confirmed in 2022.
What is the employee exception in Texas Insurance Code 151.103?
It allows a construction contract to require indemnity and defense for claims for bodily injury or death of the indemnitor's own employees, or those of its agent or its subcontractors of any tier, even if the indemnitee was negligent. In 2022 the Texas Supreme Court held that "employee" has its ordinary meaning, so workers' comp co-employee status does not extend it.
Does the Texas Anti-Indemnity Act apply to residential construction?
Not to single-family houses, townhouses, duplexes and directly related land development, which Section 151.105 excludes. Commentators note that legislative history suggests apartments and condominiums are not excluded, so multifamily work is generally treated as covered.
Can a contract waive the Texas Anti-Indemnity Act?
No. Section 151.151 says a provision of Chapter 151 may not be waived by contract or otherwise. A clause saying the parties waive the Act does not make a void indemnity enforceable.
Does the Texas Anti-Indemnity Act apply to public projects?
Section 151.105 excludes public works projects of a municipality, and it preserves governmental immunity. Other public work is not listed in that exclusion, so check the specific project and contract with counsel.
Is primary and non-contributory coverage allowed in Texas?
The Act does not mention primary and non-contributory wording, and contracts commonly require it. It decides which policy pays first for the coverage an additional insured actually has, but it cannot restore AI coverage that Section 151.104 has voided.
Do I still need a lawyer if my broker reviews the contract?
Yes. Whether an indemnity clause is enforceable, and whether it meets Texas fair notice rules, is a legal question for construction counsel. A broker's job is the insurance side: making sure your policies, endorsements and certificates match what the contract requires and the law allows.
Signing Texas subcontracts and not sure your insurance matches them? Start with the contractor insurance hub or check a certificate in the COI checker. A licensed Aiden Risk broker will review the insurance and indemnity clauses with you, line up the AI, waiver and primary endorsements your contracts require, and shop 100+ carriers, while our AI watches for the next contract that changes what you need.
