How Does an Indemnity Clause in a Subcontract Work?

By Wyatt Cooper · Published October 22, 2026 · 7 min read

Key takeaways

An indemnity clause makes you pay, and often defend, claims against the GC and owner that arise from your work; how much depends on whose fault the clause reaches.
Broad form covers even the GC's sole fault, intermediate form covers everything except the GC's sole fault, and limited form covers only your share of the fault.
Many states restrict construction indemnity by statute; Washington, for one, voids indemnity for the indemnitee's sole negligence and limits shared-fault indemnity to your own share.
Read the duty to defend, who is indemnified, and whether your liability insurance covers what you are promising, and ask for the limited form.

A subcontract's indemnity clause is your promise to pay for, and often defend, claims made against the GC, the owner and others the clause names, for injury or damage arising from your work. How far it reaches depends on its form: broad form covers even claims caused solely by the GC, intermediate form covers everything except the GC's sole fault, and limited form covers only the share of fault that is yours. State anti-indemnity laws limit some forms.

What indemnity means in a subcontract

Indemnity moves the cost of a claim from one party to another. A worker from another trade trips over your hose and sues the GC; the GC's indemnity clause tells you to defend that suit and pay what the GC owes, to the extent the clause reaches. Most subcontract clauses add a duty to defend, which means paying the lawyers from the start, before anyone decides who was at fault.

The clause usually comes down from the owner. On AIA-based work, the A401–2017 summary describes the subcontract as an agreement by which the contractor's duties under the prime contract "pass to the Subcontractor with respect to a portion of the work", and it adds an indemnity for lien and payment claims by the sub's own subcontractors and suppliers. GCs often pass the owner's indemnity down in the same words. The AIA contract documents explainer shows how the family fits.

Broad, intermediate and limited forms

The three common forms of construction indemnity, and the words that signal each
Form	Covers	Example wording (illustrative)	Risk to the sub
Broad	Every claim arising from the work, even if caused solely by the GC or owner	"regardless of whether caused in part or in whole by a party indemnified"	Highest: you pay for others' sole fault
Intermediate	Every claim the sub caused in any part, in full, but not the GC's sole fault	"caused in whole or in part by the subcontractor"	High: 10% your fault can mean 100% of the loss
Limited (comparative)	Only the share of the claim caused by the sub	"to the extent caused by the negligent acts or omissions of the subcontractor"	Matches your share of fault

The phrase "to the extent caused by" usually marks the limited form; "in whole or in part" without "to the extent" usually marks the intermediate one. Read who is indemnified, too: the GC, the owner, the architect and "their agents and employees" can each be on the list.

A worked example: one claim under each form

Claim: worker injured in a fall at an opening, $500,000 settlement

Fault: GC 70% (removed the guardrail); sub 30% (left the opening uncovered)
Broad form: Sub pays $500,000
Intermediate form: Sub pays $500,000: the sub caused it in part, so the whole claim is covered
Limited form: 30% × $500,000 = $150,000
If the GC were 100% at fault: Broad: $500,000. Intermediate: $0. Limited: $0
Under Washington's RCW 4.24.115: Shared fault: at most $150,000, and only if the clause expressly provides for it. GC's sole fault: $0, the clause is void for that
Defense costs: On top of the above, if the clause includes a duty to defend

A fictional injury claim against a GC, and what a fictional sub owes under each form. The fault shares are the example's.

Check the arithmetic: 30% of $500,000 is $150,000, and 70% is $350,000, which sums back to $500,000. The gap between the intermediate and limited forms here is $350,000, the GC's own share of fault, on one claim.

Where the law limits it: one state

Many states have anti-indemnity statutes for construction. Washington's, RCW 4.24.115, covers an agreement in connection with a contract for construction, alteration, repair or maintenance of a building or other structure attached to real estate, "purporting to indemnify, including the duty and cost to defend", against liability for bodily injury or property damage. Indemnity for damage "caused by or resulting from the sole negligence of the indemnitee, his or her agents or employees is against public policy and is void and unenforceable."

For shared fault, the statute says indemnity is "valid and enforceable only to the extent of the indemnitor's negligence and only if the agreement specifically and expressly provides therefor." It also lets the agreement waive the indemnitor's immunity under Washington's industrial insurance law, Title 51 RCW, "only if the agreement specifically and expressly provides therefor and the waiver was mutually negotiated by the parties." In effect, in Washington the limited form is the most a construction indemnity can do, and only in words that say so. Other states differ; this page names only the one read for it.

What to ask before you sign

Which form is it? Look for "to the extent caused by". If it is broad or intermediate, ask for the limited form.
Does it include a duty to defend, and does that duty also run only to the extent of your fault?
Who is indemnified? Check the list against the parties you actually work for.
Does it reach beyond injury and property damage, to fines, delays or the GC's lost profit?
Will your liability policy respond? Send the clause to your insurance agent and ask whether the indemnity you're giving is covered.
Does it flow down from the prime contract? Ask to see the owner's version.

For the insurance side of the same risk, see how much insurance a subcontractor needs and how to get added as additional insured. For the subcontract's other clause subs push back on most, see how a no-damages-for-delay clause works, and the subcontractor's guide for every step after.

The bottom line

An indemnity clause decides who pays when someone gets hurt or something gets damaged. Broad and intermediate forms can make you pay for the GC's fault; the limited form ties what you pay to your own share.

Read the form, the duty to defend and who is indemnified, check your insurance covers it, and have an attorney read it under the law of the state where the job is.

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Sources

RCW 4.24.115, Validity of agreement to indemnify against liability for negligence relative to construction — Washington State Legislature. Read October 22, 2026.
Summary: A401–2017, Standard Form of Agreement Between Contractor and Subcontractor — AIA Contract Documents. Read October 22, 2026.

Questions

What does an indemnification clause do in a subcontract?

It makes the sub pay, and often defend, claims against the GC, owner and others it names for injury or damage arising from the sub's work, to the extent the clause reaches.

What is the difference between broad, intermediate and limited form indemnity?

Broad form covers claims even when the GC alone was at fault; intermediate covers the whole claim whenever the sub was partly at fault, but not the GC's sole fault; limited covers only the sub's share of fault.

Is broad form indemnity enforceable?

Not everywhere. Many states restrict it by statute. Washington's RCW 4.24.115 voids construction indemnity for the indemnitee's sole negligence and limits shared-fault indemnity to the indemnitor's own negligence, if the agreement expressly provides for it.

What is the duty to defend?

A promise to pay for the indemnified party's legal defense from the start of a claim, usually before fault is decided. It can cost more than the claim itself, so read whether it is limited to your share of fault.

Does my insurance cover what I promise in an indemnity clause?

Possibly, within the policy's terms. Send the clause to your insurance agent before you sign and ask whether the indemnity you're giving is covered.