An indemnity agreement in California is generally enforceable, but the state polices both what you can shift and how clearly your contract must say it. Civil Code Section 1668 voids any attempt to contract away liability for your own fraud, willful injury, or violation of law. In construction, layered statutes void indemnity for the protected party’s sole negligence and, in many cases, its active negligence. Everywhere else, courts read indemnity language strictly and against the party seeking protection, so vague wording buys less protection than parties assume.
The Three Types of Express Indemnity
California courts sort written indemnity clauses into three categories drawn from MacDonald & Kruse, Inc. v. San Jose Steel Co. The category your clause falls into determines whether you can recover when your own conduct contributed to the loss.1Justia Law. MacDonald and Kruse Inc v San Jose Steel Co
A Type I clause is the broadest. It expressly and unequivocally states that the indemnitor will cover the indemnitee’s own negligence, whether that negligence is the sole cause or a contributing one. This is the most aggressive form of risk-shifting and the most heavily regulated by statute.
A Type II clause uses broad language such as “all claims arising from the work” or “howsoever caused” without specifically mentioning the indemnitee’s negligence. Courts read Type II clauses as covering the indemnitee’s passive negligence, like failing to notice a hazard, but not its active negligence, like directing unsafe work.
A Type III clause is the narrowest. It limits the indemnitor’s obligation to losses caused by the indemnitor’s own acts. Any negligence by the indemnitee, whether active or passive, defeats recovery.
The practical consequence: a clause that says “Contractor shall indemnify Owner against all claims arising from the work” is Type II at best. It will not cover the owner’s active negligence. To shift liability for the indemnitee’s own fault, the contract must say so in express, unequivocal terms.1Justia Law. MacDonald and Kruse Inc v San Jose Steel Co
What California Voids No Matter What Your Contract Says
Some indemnity terms cannot be saved by careful drafting. Civil Code Section 1668 voids any contract that tries to exempt a party from responsibility for its own fraud, willful injury to another person or their property, or any violation of law.2California Legislative Information. California Code Civil Code 1668 This applies to every contract type in California and marks the outer boundary of risk-shifting.
Construction Contracts
Construction contracts face additional statutory limits that get progressively stricter depending on who the parties are. Civil Code Section 2782(a) applies to all construction contracts and voids any indemnity provision that would force one party to cover losses caused by the other party’s sole negligence or willful misconduct.3California Legislative Information. California Code CIV 2782 – Indemnity Only the offending portion is struck; the rest of the clause survives.
Public agency construction contracts go further: indemnity clauses that impose liability on the contractor for the agency’s active negligence are also void. For contracts entered on or after January 1, 2013, the same active-negligence protection extends to contracts with private property owners who are not themselves acting as the contractor or supplier.3California Legislative Information. California Code CIV 2782 – Indemnity
Section 2782.05 protects subcontractors on agreements entered on or after January 1, 2013. A subcontractor cannot be required to indemnify a general contractor, construction manager, or another subcontractor for losses caused by that party’s active negligence or willful misconduct, and any indemnity obligation that exceeds the subcontractor’s own scope of work is void.4California Legislative Information. California Code CIV 2782.05 – Indemnity in Construction Contracts
Design professionals receive the strongest protection. For contracts entered on or after January 1, 2018, Section 2782.8 limits indemnity to claims that actually arise from the design professional’s own negligence, recklessness, or willful misconduct. Defense costs charged to the design professional cannot exceed their proportionate share of fault, and this protection cannot be waived by contract.5California Legislative Information. California Code CIV 2782.8 – Indemnity
Non-Construction Contracts
Sections 2782 through 2782.8 apply only to construction contracts. Commercial leases, service agreements, supply contracts, and other non-construction deals sit outside those statutes, and parties have more room to allocate risk. Section 1668 still applies, and courts still evaluate the language under general contract principles: it must be clear, the parties must have genuinely agreed, and it cannot violate public policy. The MacDonald & Kruse framework still governs, so ambiguous wording is read narrowly against the party seeking protection.
The Duty to Defend Is Not the Duty to Indemnify
Indemnity clauses often create two separate obligations that trigger at different points. Confusing them is a common and expensive mistake.
The duty to defend requires the indemnitor to pay for the indemnitee’s legal defense as soon as a covered claim is tendered. In Crawford v. Weather Shield Manufacturing, the California Supreme Court held that this obligation arises immediately when the indemnitee tenders the defense, before anyone knows whether indemnity will ultimately be owed. The duty to defend, the court said, “cannot depend on the outcome” of the underlying litigation. Even if a jury later finds the indemnitor was not negligent at all, the defense obligation existed from the moment of tender.6Justia Law. Crawford v Weather Shield Mfg Inc
The duty to indemnify is narrower. It is the obligation to reimburse the indemnitee for an actual loss, such as a judgment or settlement payment, and it vests only once liability is established and the loss is suffered. You can owe a full defense and ultimately owe nothing in indemnity.
Even when the contract is silent on defense, Section 2778 implies a duty to defend whenever the contract provides indemnity against claims, demands, or liability. If you tender the defense and the indemnifying party refuses, any judgment entered against you is treated as conclusive proof of loss against that party. Ignoring a valid defense tender is high-risk.7California Legislative Information. California Code CIV 2778 – Indemnity Interpretation Rules
“Liability” vs. “Claims”: A Word Choice That Changes When You Can Collect
Civil Code Section 2778 supplies seven default rules for reading any indemnity agreement. Two of them turn on the exact noun the drafters used.
If the contract provides indemnity against “liability,” the protected party can demand reimbursement the moment liability attaches, even before any money changes hands. If the contract instead uses “claims,” “demands,” “damages,” or “costs,” the protected party has to actually pay first and then seek reimbursement. Same clause, different word, very different cash flow.7California Legislative Information. California Code CIV 2778 – Indemnity Interpretation Rules
Indemnity Without a Written Clause
Not all indemnity in California comes from a contract. Equitable indemnity allows courts to allocate fault among multiple parties responsible for the same injury based on comparative fault. A general contractor found 30% at fault and a subcontractor found 70% at fault each bear their proportionate share, without any written indemnity language between them.
What used to be treated as three separate doctrines (express, implied contractual, and traditional equitable indemnity) is now understood as two: express indemnity created by contract, and equitable indemnity created by law. Implied contractual indemnity is now considered a form of equitable indemnity. To recover on that theory, the party seeking indemnity must show that the other party failed to use reasonable care in performing under the contract and that this failure was a substantial factor in causing the harm.8Justia. CACI No 3801 Implied Contractual Indemnity Where the parties have an express indemnity clause covering the same subject, the written terms control and implied indemnity generally is not available.
The Deadline to Bring an Indemnity Claim
A claim on a written indemnity agreement is governed by Code of Civil Procedure Section 337, which sets a four-year limitations period for written obligations.9California Legislative Information. California Code of Civil Procedure CCP 337 Oral indemnity agreements, which are rare, drop to two years.
The clock does not start when the underlying incident occurred. For indemnity against claims, damages, or costs, it runs from the date you actually paid out. For indemnity against liability, it runs from the date liability was established. A subcontractor who pays a settlement in 2026 for a defect that arose in 2020 has four years from the 2026 payment to sue for indemnity. Miss it and the right is gone, no matter how well the underlying clause was drafted.