Sued Alongside the Contractor

A customer slips on ice in a retailer’s parking lot and suffers a serious injury. She sues both the retailer and the snow removal contractor it hired, claiming neither kept the lot safe. The retailer’s contract requires the contractor to defend and indemnify it and to carry liability insurance naming the retailer as an additional insured.

Many retailers read that contract and assume the contractor now owns the case. In Illinois, a statute written specifically for snow removal changes that assumption, and the retailer’s best protection often lies elsewhere.

Illinois Voids Part of the Indemnity Clause

The Snow Removal Service Liability Limitation Act voids contract provisions that require a snow removal contractor to indemnify, hold harmless, or defend a customer for the customer’s own negligence. The restriction runs both ways. The Act applies to contracts made on or after August 25, 2016, and it does not cover contracts for public roads or with public bodies.

A broad clause therefore cannot transfer the retailer’s own share of fault to the contractor, and that includes the promise to defend. A contractual duty to defend is separate from indemnity and is not the same as an insurer’s duty to defend, but to the extent it covers the retailer’s own negligence, the Act voids it too. What may remain is indemnity for the contractor’s own share, which the Act’s text does not prohibit, although contractors have argued that such claims are really contribution in another form. That question is still developing. Construction contracts are subject to a separate Illinois statute with similar limits.

Additional Insured Coverage Survives the Act

The Act expressly does not apply to insurance policies, which makes the additional insured requirement the retailer’s strongest route. If the retailer qualifies as an additional insured under the contractor’s policy, it may have a direct right to a defense from the contractor’s insurer, independent of the indemnity clause the Act has limited.

Qualifying depends on the policy, not the contract. Many endorsements cover the additional insured only for liability caused at least in part by the named insured’s work, and Illinois law provides that a certificate of insurance cannot amend, extend, or alter the coverage the policy itself provides. The key step is obtaining the actual policy and endorsements and tendering the lawsuit to the contractor’s insurer in writing, with the complaint and the contract attached.

Contribution Rights and the Settlement Trap

Even without enforceable indemnity, Illinois’s Joint Tortfeasor Contribution Act lets defendants who share liability for the same injury allocate it by their relative fault, so the retailer can seek contribution from the contractor for the contractor’s share. The same Act, however, discharges a defendant who settles with the plaintiff in good faith from all contribution liability. If the contractor settles early, the retailer’s contribution claim against it disappears, and the retailer is left with a credit for the settlement amount against any judgment.

That makes timing important. A retailer that learns of a proposed settlement can be heard on whether it was made in good faith, and a contractual indemnity claim rests on a separate promise that is analyzed differently. Asserting every available right early keeps those options open.

A Promise Is Only as Good as Its Funding

A judgment for indemnity or contribution against a small contractor with no assets may be worth very little. The contractor’s insurance, any performance bond, and any guarantee are often the only realistic sources of payment, and each has its own requirements and limits.

The most valuable step usually comes first: identifying which rights exist and tendering to the right insurer before the defense costs build. Tenants facing a similar demand from a landlord should read our article on common area injuries and lease indemnity.

We help businesses sued alongside contractors identify and pursue indemnity, additional insured, and contribution rights. If your business has been sued over an injury on its property, we can review the contracts and policies before costs build. Contact us to discuss your matter.

This article provides general information and does not constitute legal advice. For guidance concerning a specific matter, see our insurance recovery services. Coverage depends on the policy wording, the facts, and applicable law. To discuss potential representation, request a consultation. Submitting an inquiry does not establish an attorney-client relationship.