NY Senate Bill Seeks to Ban Certain Broad-Form Indemnity Clauses for Design Professionals

On January 7, 2026, Senate Bill 2025-S4591 was referred to the NY Senate Procurement and Contracts Committee, a critical step in the legislative process before a bill can be brought for a full Senate floor vote. If it becomes law, it would ban certain indemnification obligations in public contracts involving engineers, architects, surveyors, and other design professionals. The bill effectively provides that a public agency would only be entitled to indemnification and defense from a design professional to the extent of the design professional’s own negligence, recklessness, or willful misconduct. Design professionals would not be required to indemnify a public agency for the agency’s own negligence or that of third parties.

How Does This Differ from Current Laws?

Under current practices, some public agencies and political subdivisions include broad indemnification clauses in contracts for design services on public work. In a nutshell, indemnification means reimbursement for money paid by another party (the “indemnitee”) because of the indemnitor’s fault. Broad-form indemnification provisions can require a design professional to defend and indemnify an agency for, among other things, claims that arise from the negligence of the agency itself or third parties, even if the claim is not caused in any way by the design professional’s own fault. Because most public agencies do not allow for negotiation of their standard contracts, design professionals are left with a decision to either accept the indemnification obligations or decline to pursue the project.

Senate Bill S4591 would make such obligations void and unenforceable in public contracts “except as to damages that are caused by or are the proximate result of the negligence, recklessness, or willful misconduct of the design professional.” The bill goes on to clarify that any indemnification obligation permitted by the new law is limited and enforceable only to the degree or percentage of fault attributable to the design professional. This would mean, for example, that if an engineer, architect, or surveyor were found to be 30% negligent and other parties were 70% negligent, then the engineer, architect, or surveyor would only be responsible for 30% of the costs—not 100%.

This reform would apply to contracts for professional services related to public buildings, bridges, highways, water and sewer systems, and other facilities, whether with city and county agencies, state authorities, or the state itself.

Historical and Legislative Context

This is not the first attempt to address broad-form indemnification obligations for design professionals in New York. Similar bills have circulated in past legislative sessions at least as far back as 2018, which passed the New York State Senate and Assembly but was ultimately vetoed by Governor Cuomo. In 2025, a substantially similar bill was presented to the Senate Procurement and Contracts Committee and received unanimous committee approval but did not make it to the floor for a full Senate vote.

The only existing law in New York that limits indemnification obligations as they may relate to design professionals is NY General Obligations Law § 5-322.1. However, this law only applies to indemnification for damages arising out of bodily injury or property damage and only precludes indemnification for the indemnitee’s own negligence—not the negligence of third parties. The majority of indemnification risks for design professionals, however, do not relate to bodily injury or property damage claims; they more often relate to construction cost overruns, delays, and economic losses allegedly suffered by other project stakeholders.

What Other States Have Done

Across the United States, many states have enacted similar anti-indemnity statutes that limit or prohibit enforcement of broad indemnification clauses in construction and design contracts. These laws vary significantly by jurisdiction:

• Some states prohibit indemnification for the indemnitee’s sole negligence only, which could still require the indemnitor to indemnify for 100% of the damages even though the indemnitor may only be 1% at fault.

• Other states, similar to New York’s Senate Bill S4591, limit indemnity to the degree or percentage of fault caused by the indemnitor’s own negligence.

Such statutes reflect a broad industry trend toward more balanced indemnification terms in contracting, particularly where one party lacks bargaining power like in the case of non-negotiable contract terms.

Pros and Cons of the Proposed Reform

As with any new legislation, there are potential pros and cons that contracting parties should consider:

Potential Benefits

• Fairer allocation of risk: Limits obligations to the extent caused by the design professional’s negligent conduct, aligning liability more closely with fault.

• Insurance coverage: Aligns indemnification obligations with typical professional liability coverage, increasing the likelihood of coverage which benefits both design professionals and their public agency clients.

• Improved market participation: Could encourage more qualified design firms to bid on certain public contracts if excessive indemnity risk is reduced, potentially improving the quality and reducing the cost of design on public projects.

Potential Challenges

• Diminished indemnity rights: Local and state agencies may worry about diminished rights if design professionals cannot be required to indemnify for broader liabilities, but such agencies may still have recovery mechanisms against other more responsible parties.

• Contract complexity: Some public agency contracts may need to be re-written to be brought into compliance if the bill becomes law.

• Limited scope: The bill only applies to public contracts and does not extend to private-sector contracts as some other states do.

What’s Next

We will continue to monitor the progress of Senate Bill S4591 as it advances through the legislative process. Before it can become law, the bill must receive Committee approval, pass a vote on the Senate and Assembly floors (potentially with amendments), and be signed into law by the Governor. Stakeholders, including engineering and architectural societies, municipal associations, and legal professionals, should remain engaged and continue monitoring developments as part of the broader dialogue on risk management, contract fairness, and liability reform.

If you have any questions regarding this article or any Construction or Litigation issue, please contact Tom Curran at (585) 258-2811 or tcurran@underbergkessler.com.