Indemnity and Liability Clause Pack - Alabama

INDEMNITY AND LIABILITY CLAUSE PACK — ALABAMA

Jurisdiction: State of Alabama
Governing Law: Alabama Code; Alabama common law
Template Version: 2026-02-26

TABLE OF CONTENTS

• PART I: Legal Framework
• PART II: Corporate Indemnification Clauses
• PART III: Contractual Indemnity Clause Pack
• PART IV: Limitation of Liability Clauses
• PART V: Anti-Indemnity Considerations
• PART VI: Insurance Requirements
• PART VII: Alabama-Specific Practice Notes
• Sources and References

PART I: LEGAL FRAMEWORK

1.1 Alabama Corporate Indemnification Statutes

Alabama corporate indemnification is governed by the Alabama Business and Nonprofit Entities Code, Title 10A, Chapter 2, Article 8, Division E (§§ 10A-2-8.50 through 10A-2-8.58). These provisions closely follow the Revised Model Business Corporation Act framework and provide both permissive and mandatory indemnification for directors and officers.

Statutory Structure:

Key provisions:

• Permissive indemnification (§ 10A-2-8.51): A corporation may indemnify an individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if: (1) the individual conducted himself or herself in good faith; (2) in the case of conduct in an official capacity with the corporation, the individual reasonably believed the conduct was in the best interests of the corporation; (3) in all other cases, the individual reasonably believed the conduct was at least not opposed to the best interests of the corporation; and (4) in the case of any criminal proceeding, the individual had no reasonable cause to believe the conduct was unlawful. A corporation may not indemnify a director in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation, or in connection with any other proceeding in which the director was adjudged liable on the basis that the director received an improper personal benefit.

• Mandatory indemnification (§ 10A-2-8.52): Unless limited by its certificate of formation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because of being a director, against reasonable expenses incurred in connection with the proceeding.

• Advancement of expenses (§ 10A-2-8.53): A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition if the director furnishes the corporation with a written affirmation of good faith belief that the director has met the applicable standard of conduct and a written undertaking to repay the advance if it is ultimately determined that the director did not meet the standard of conduct.

• Non-exclusivity (§ 10A-2-8.58): Indemnification authorized under Division E is not exclusive and is in addition to indemnification that may be contained in the corporation's certificate of formation, bylaws, a resolution of shareholders or board of directors, or in a contract.

1.2 Common Law Indemnity in Alabama

Alabama courts recognize both express and implied contractual indemnity. Under Alabama common law:

• Express indemnity agreements are enforceable, including provisions requiring indemnification for the indemnitee's own negligence, provided the indemnity agreement clearly and unequivocally expresses such intent (Industrial Tile, Inc. v. Stewart, 388 So. 2d 171 (Ala. 1980)).
• Implied indemnity may arise from the relationship between the parties or from equitable principles where one party has been compelled to pay the debt or discharge the obligation of another.
• Alabama courts apply a clear and unambiguous standard: indemnification provisions are construed strictly against the indemnitee, and any ambiguity is resolved against indemnification for the indemnitee's own negligence.

1.3 Contractual Indemnity Under Alabama Law

Alabama does not have a general anti-indemnity statute applicable to commercial contracts. However, Alabama courts scrutinize indemnification agreements that require a party to indemnify another for the indemnitee's own negligence. Such agreements are enforceable if: (a) the contract clearly indicates an intention to indemnify against the consequences of the indemnitee's negligence; (b) the indemnification provision was clearly understood by the indemnitor; and (c) there is no evidence of a disproportionate bargaining position in favor of the indemnitee.

PART II: CORPORATE INDEMNIFICATION CLAUSES

2.1 Mandatory Indemnification Provision

CLAUSE 2.1 — MANDATORY INDEMNIFICATION

The Corporation shall indemnify each person who was or is a party to, or is threatened to be made a party to, any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (including any action by or in the right of the Corporation), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, to the fullest extent permitted by Alabama Code §§ 10A-2-8.50 through 10A-2-8.58, as the same exist or may hereafter be amended (but, in the case of any amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against expenses (including attorney fees), judgments, fines, penalties, and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit, or proceeding.

Mandatory Component (§ 10A-2-8.52): Unless limited by the Certificate of Formation, the Corporation shall indemnify a director or officer who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director or officer was a party because of being a director or officer of the Corporation, against reasonable expenses incurred by such director or officer in connection with the proceeding, without the necessity of any determination as to the standard of conduct.

2.2 Permissive Indemnification Resolution

CLAUSE 2.2 — BOARD RESOLUTION FOR PERMISSIVE INDEMNIFICATION

RESOLVED, that the Corporation may indemnify [________________________________] ("Indemnitee") against liability incurred in connection with [________________________________] (the "Proceeding"), subject to the following determinations required by Ala. Code § 10A-2-8.51:

(a) The Board of Directors has determined, in the manner required by § 10A-2-8.55, that Indemnitee conducted himself or herself in good faith;

(b) In the case of conduct in Indemnitee's official capacity with the Corporation, the Board has determined that Indemnitee reasonably believed the conduct was in the best interests of the Corporation;

(c) In all other cases, the Board has determined that Indemnitee reasonably believed the conduct was at least not opposed to the best interests of the Corporation; and

(d) In the case of any criminal proceeding, the Board has determined that Indemnitee had no reasonable cause to believe the conduct was unlawful.

Determination Procedure (§ 10A-2-8.55): The required determination shall be made by:

☐ A majority vote of directors who are not parties to the Proceeding (even if less than a quorum)

☐ A committee of two or more directors appointed by majority vote of directors not parties to the Proceeding

☐ Special legal counsel selected by the Board or a committee in the manner described above

☐ The shareholders (excluding shares owned by or voted under control of directors who are parties to the Proceeding)

2.3 Advancement of Expenses

CLAUSE 2.3 — ADVANCEMENT OF EXPENSES

The Corporation shall pay for or reimburse the reasonable expenses incurred by an Indemnitee who is a party to a proceeding in advance of the final disposition of such proceeding, upon satisfaction of the following conditions required by Ala. Code § 10A-2-8.53:

(a) The Indemnitee shall furnish the Corporation with a written affirmation of the Indemnitee's good faith belief that the Indemnitee has met the standard of conduct described in § 10A-2-8.51; and

(b) The Indemnitee shall furnish the Corporation with a written undertaking, executed personally by the Indemnitee or on the Indemnitee's behalf, to repay the advance if it is ultimately determined that the Indemnitee did not meet the standard of conduct.

The undertaking required by subsection (b) above shall be an unlimited general obligation of the Indemnitee but need not be secured and may be accepted without reference to the financial ability of the Indemnitee to make repayment.

The Corporation shall authorize advancement of expenses upon a determination that the conditions set forth above have been met, through the same procedures applicable to the authorization of indemnification under § 10A-2-8.55.

2.4 Directors and Officers Insurance

CLAUSE 2.4 — D&O INSURANCE AUTHORIZATION

Pursuant to Ala. Code § 10A-2-8.57, the Corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the Corporation, or who, while a director, officer, employee, or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against liability asserted against or incurred by the individual in that capacity or arising from the individual's status as a director, officer, employee, or agent, whether or not the Corporation would have the power to indemnify the individual against the same liability under §§ 10A-2-8.51 or 10A-2-8.52.

Minimum Coverage Parameters:

☐ Each-occurrence limit: $[________________________________]

☐ Annual aggregate limit: $[________________________________]

☐ Retention/deductible: $[________________________________]

☐ Policy form: ☐ Claims-made ☐ Occurrence

☐ Tail coverage period (if claims-made): [____] years

2.5 Non-Exclusivity of Rights

CLAUSE 2.5 — NON-EXCLUSIVITY

The rights to indemnification and advancement of expenses conferred by this Article shall not be exclusive of any other right that any person may have or hereafter acquire under any provision of the Certificate of Formation, these Bylaws, any agreement, vote of shareholders or disinterested directors, or otherwise. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees, or agents respecting indemnification and advancement of expenses, to the fullest extent permitted by Alabama law.

Statutory Basis: Ala. Code § 10A-2-8.58 provides that indemnification and advancement of expenses authorized under Division E are not exclusive and are in addition to that which may be contained in the Corporation's certificate of formation, bylaws, a resolution of shareholders or board of directors, or in a contract.

PART III: CONTRACTUAL INDEMNITY CLAUSE PACK

3.1 Mutual Indemnification (Balanced)

CLAUSE 3.1 — MUTUAL INDEMNIFICATION

Each party (when acting as the "Indemnifying Party") shall indemnify, defend, and hold harmless the other party and its officers, directors, employees, agents, successors, and permitted assigns (collectively, the "Indemnified Parties") from and against any and all third-party claims, demands, actions, suits, proceedings, losses, damages, liabilities, judgments, fines, penalties, costs, and expenses (including reasonable attorney fees and court costs) (collectively, "Losses") arising out of or relating to:

(a) Any material breach of any representation, warranty, or obligation of the Indemnifying Party under this Agreement;

(b) The gross negligence or willful misconduct of the Indemnifying Party or its officers, directors, employees, agents, or subcontractors;

(c) Any infringement or misappropriation of any third-party intellectual property right by the Indemnifying Party's materials, products, or services provided under this Agreement; or

(d) Any violation of applicable law by the Indemnifying Party in the performance of its obligations under this Agreement,

in each case, except to the extent such Losses arise from the negligence or willful misconduct of the Indemnified Parties or from the Indemnified Parties' breach of this Agreement.

Alabama Practice Note: Alabama courts scrutinize indemnification provisions requiring indemnification for the indemnitee's own negligence. This clause limits each party's indemnification obligation to Losses arising from the Indemnifying Party's conduct, consistent with Alabama law. Practitioners should ensure indemnification provisions are clear and unambiguous as to the scope of indemnification intended.

3.2 One-Way Indemnification (Provider to Customer)

CLAUSE 3.2 — PROVIDER INDEMNIFICATION OF CUSTOMER

Provider shall indemnify, defend, and hold harmless Customer and its officers, directors, employees, agents, successors, and permitted assigns from and against any and all Losses arising out of or relating to:

(a) Any third-party claim alleging that Customer's authorized use of Provider's products or services infringes, misappropriates, or otherwise violates any patent, copyright, trademark, trade secret, or other intellectual property right of a third party;

(b) Provider's material breach of any representation, warranty, or obligation under this Agreement;

(c) The gross negligence or willful misconduct of Provider, its employees, agents, or subcontractors; or

(d) Provider's violation of applicable law.

Exclusions from Provider's Indemnification Obligation:

Provider's obligations under this Section shall not apply to claims arising from: (i) modifications to Provider's products or services made by Customer without Provider's written approval; (ii) use of Provider's products or services in combination with third-party products, services, or materials not supplied or approved by Provider; (iii) Customer's use of Provider's products or services in violation of this Agreement or applicable law; or (iv) Customer's continued use after being notified of the alleged infringement and provided a non-infringing alternative.

Mitigation Remedies: If any product or service becomes, or in Provider's reasonable opinion is likely to become, the subject of an infringement claim, Provider may, at its sole option and expense: (1) procure for Customer the right to continue using the affected product or service; (2) replace or modify the affected product or service to make it non-infringing without material degradation in functionality; or (3) if neither (1) nor (2) is commercially practicable, terminate the affected product or service and refund to Customer any prepaid, unused fees.

3.3 Customer Indemnification (Customer to Provider)

CLAUSE 3.3 — CUSTOMER INDEMNIFICATION OF PROVIDER

Customer shall indemnify, defend, and hold harmless Provider and its officers, directors, employees, agents, successors, and permitted assigns from and against any and all Losses arising out of or relating to:

(a) Any third-party claim arising from Customer Data, including but not limited to claims of defamation, invasion of privacy, or infringement of intellectual property rights;

(b) Customer's use of Provider's products or services in violation of applicable law or this Agreement;

(c) Customer's use of Provider's products or services in combination with third-party systems, products, or materials not supplied or approved by Provider, to the extent such combination gives rise to the claim; or

(d) Customer's gross negligence or willful misconduct.

3.4 Third-Party Claims Procedure

CLAUSE 3.4 — THIRD-PARTY CLAIMS PROCEDURE

(a) Notice. The Indemnified Party shall promptly notify the Indemnifying Party in writing of any third-party claim for which indemnification is sought (a "Claim Notice"). The Claim Notice shall describe the claim in reasonable detail and include copies of any relevant pleadings, correspondence, or other documents. The failure to provide prompt notice shall not relieve the Indemnifying Party of its indemnification obligations except to the extent the Indemnifying Party is materially prejudiced by such failure.

(b) Defense. The Indemnifying Party shall have the right, at its sole cost and expense, to assume and control the defense of any claim for which it is obligated to provide indemnification, using counsel of its own choosing reasonably acceptable to the Indemnified Party. The Indemnified Party shall cooperate in all reasonable respects with the Indemnifying Party and its counsel in the defense of such claim, at the Indemnifying Party's expense.

(c) Participation. The Indemnified Party may participate in the defense of any claim with its own counsel and at its own expense; provided, however, that if the Indemnifying Party fails to assume the defense within [____] business days after receiving the Claim Notice, or if there exists a conflict of interest that would make it inappropriate for the same counsel to represent both parties, the Indemnified Party may assume the defense at the Indemnifying Party's expense.

(d) Settlement. The Indemnifying Party shall not settle any claim without the Indemnified Party's prior written consent (not to be unreasonably withheld, conditioned, or delayed) if the settlement: (i) imposes any non-monetary obligation on, or requires any admission of liability by, the Indemnified Party; (ii) does not include a complete and unconditional release of the Indemnified Party from all liability with respect to the claim; or (iii) involves the payment of money for which the Indemnified Party will not be fully indemnified.

(e) Cooperation. The Indemnified Party shall make available to the Indemnifying Party all relevant records, documents, and information in its possession or control, and shall provide reasonable assistance and cooperation, at the Indemnifying Party's expense.

3.5 Direct Claims Between Parties

CLAUSE 3.5 — DIRECT CLAIMS PROCEDURE

(a) Notice. In the event of a direct claim (i.e., a claim not involving a third-party action), the Indemnified Party shall deliver a written notice to the Indemnifying Party specifying: (i) the nature of the claim in reasonable detail; (ii) the specific provisions of this Agreement alleged to have been breached; and (iii) the estimated amount of Losses incurred or expected to be incurred.

(b) Response. The Indemnifying Party shall respond to the direct claim notice within [____] business days, either accepting the claim (in whole or in part), rejecting the claim, or requesting additional information.

(c) Resolution. If the parties cannot resolve the direct claim within [____] business days after the Indemnifying Party's response, either party may pursue resolution through the dispute resolution mechanisms set forth in this Agreement.

PART IV: LIMITATION OF LIABILITY CLAUSES

4.1 Consequential Damages Exclusion

CLAUSE 4.1 — EXCLUSION OF CONSEQUENTIAL DAMAGES

EXCEPT FOR THE EXCLUDED CLAIMS SET FORTH IN SECTION 4.3 BELOW, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS, LOSS OF REVENUE, LOSS OF BUSINESS OPPORTUNITIES, BUSINESS INTERRUPTION, LOSS OF DATA, LOSS OF GOODWILL, COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR ANY OTHER SIMILAR DAMAGES, ARISING OUT OF OR RELATING TO THIS AGREEMENT, WHETHER BASED ON WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR ANY OTHER LEGAL THEORY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND EVEN IF A LIMITED REMEDY SET FORTH HEREIN IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE.

Alabama Practice Note: Alabama courts generally enforce consequential damages waivers in commercial contracts between sophisticated parties where the waiver is bargained-for and not unconscionable. Under Alabama's UCC (Ala. Code § 7-2-719), limitation of consequential damages for personal injury in consumer goods cases is prima facie unconscionable. The Alabama Supreme Court has held that exculpatory clauses are not favored in law and are strictly construed against the party relying on them (Scrushy v. Tucker, 955 So. 2d 988 (Ala. 2006)).

4.2 Cap on Aggregate Liability

CLAUSE 4.2 — AGGREGATE LIABILITY CAP

EXCEPT FOR THE EXCLUDED CLAIMS SET FORTH IN SECTION 4.3 BELOW, EACH PARTY'S TOTAL CUMULATIVE LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT, WHETHER BASED ON WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR ANY OTHER LEGAL THEORY, SHALL NOT EXCEED:

☐ Option A (Fee-Based Cap): The aggregate amount of fees actually paid or payable by Customer to Provider during the [____]-month period immediately preceding the first event giving rise to such liability.

☐ Option B (Fixed-Dollar Cap): $[________________________________].

☐ Option C (Greater-Of Cap): The greater of (i) the aggregate amount of fees actually paid or payable by Customer to Provider during the [____]-month period immediately preceding the first event giving rise to such liability, or (ii) $[________________________________].

4.3 Carve-Outs from Liability Limitations

CLAUSE 4.3 — EXCLUDED CLAIMS

The limitations of liability set forth in Sections 4.1 and 4.2 shall not apply to (collectively, "Excluded Claims"):

(a) Either party's indemnification obligations for third-party intellectual property infringement claims under Section 3.2 or Section 3.3;

(b) Either party's liability arising from gross negligence or willful misconduct;

(c) Either party's liability arising from a breach of its confidentiality obligations under this Agreement;

(d) Either party's liability arising from a data breach caused by such party's failure to maintain agreed-upon security controls;

(e) Customer's obligation to pay fees due and payable under this Agreement;

(f) Either party's liability arising from fraud or intentional misrepresentation; and

(g) Either party's liability arising from bodily injury, death, or damage to tangible property caused by its negligence or willful misconduct.

Optional Supercap for Data Breach or Security Incidents:

☐ Notwithstanding the foregoing, each party's total cumulative liability for a data breach caused by such party's failure to maintain agreed-upon security controls shall not exceed the greater of: (i) [____] times the liability cap set forth in Section 4.2; or (ii) $[________________________________].

4.4 Enforceability Under Alabama Law

CLAUSE 4.4 — ENFORCEABILITY SAVINGS PROVISION

The parties acknowledge that the limitations of liability and exclusions of damages set forth in this Agreement reflect a fair and reasonable allocation of risk between the parties and are a material inducement for each party to enter into this Agreement. If any limitation or exclusion is found to be unenforceable under Alabama law, such limitation or exclusion shall be reformed to the minimum extent necessary to make it enforceable, and the remaining limitations and exclusions shall remain in full force and effect.

Alabama Enforceability Notes:

• Alabama courts enforce contractual limitation of liability provisions in commercial agreements between sophisticated parties, but such provisions are strictly construed against the party seeking to rely on them.
• Limitations of liability for willful misconduct, fraud, or intentional torts are generally void as against public policy in Alabama.
• Alabama follows a contributory negligence system. A plaintiff's own negligence, however slight, bars recovery entirely (absent willful or wanton conduct). This framework may affect the practical application of indemnification and limitation of liability provisions.

PART V: ANTI-INDEMNITY CONSIDERATIONS

5.1 No General Anti-Indemnity Statute

Alabama does not have a general anti-indemnity statute. Unlike most states, Alabama has not enacted legislation specifically prohibiting or limiting indemnification agreements in construction contracts or other contexts. As a result, contractual indemnification provisions — including provisions requiring indemnification for the indemnitee's own negligence — are generally enforceable in Alabama, subject to the common law requirements described below.

5.2 Common Law Limitations on Indemnification for Own Negligence

Although Alabama lacks an anti-indemnity statute, Alabama courts apply the following limitations to indemnification provisions that purport to require indemnification for the indemnitee's own negligence:

(a) Clear and Unambiguous Language Required: An indemnification provision must clearly and unequivocally express the intent to indemnify the indemnitee for the consequences of the indemnitee's own negligence. General indemnification language will not be construed to cover the indemnitee's own negligence.

(b) Understanding by Indemnitor: The indemnification provision must have been clearly understood by the indemnitor.

(c) Bargaining Position: There must be no evidence of a disproportionate bargaining position in favor of the indemnitee.

(d) Public Policy: Provisions that purport to exculpate a party from liability for willful or wanton misconduct are void as against public policy.

5.3 Construction Indemnity Clause (Alabama Practice)

CLAUSE 5.3 — CONSTRUCTION INDEMNITY (ALABAMA)

To the maximum extent permitted by Alabama law, Contractor shall indemnify, defend, and hold harmless Owner and its officers, directors, employees, and agents from and against any and all Losses arising out of or relating to:

(a) Bodily injury (including death) to any person;

(b) Damage to property (including loss of use thereof); or

(c) Any other loss, damage, or expense,

caused by or arising out of the negligent acts, errors, or omissions of Contractor, its subcontractors, agents, or employees in the performance of the Work.

IMPORTANT — ALABAMA-SPECIFIC NOTICE:

This indemnification obligation extends to Losses caused by the concurrent negligence of Owner and Contractor, to the extent such Losses are caused by or arise from the negligent acts, errors, or omissions of Contractor, its subcontractors, agents, or employees. The parties expressly acknowledge and agree that this indemnification provision is intended to require Contractor to indemnify Owner for Losses arising from Owner's concurrent negligence, and Contractor has been clearly advised of and understands this obligation.

Practice Note: Because Alabama lacks an anti-indemnity statute, this clause may lawfully require Contractor to indemnify Owner even for Owner's concurrent negligence, provided the intent is clearly expressed and understood. However, indemnification for Owner's sole negligence or willful misconduct should be avoided as potentially unenforceable.

5.4 Contributory Negligence Impact

Alabama is one of the few remaining states that follows the doctrine of pure contributory negligence. Under this doctrine, a plaintiff whose own negligence contributed to the injury — even to a slight degree — is barred from recovery entirely, unless the defendant acted willfully or wantonly. This doctrine significantly affects indemnification and limitation of liability provisions in Alabama:

• Indemnification claims: An indemnitor may argue that the indemnitee's contributory negligence bars or reduces the indemnification obligation. Draft indemnification provisions to clearly allocate fault.
• Limitation of liability: The contributory negligence defense may provide an additional layer of protection beyond contractual liability caps.
• Wanton conduct exception: Contributory negligence is not a defense to claims of wanton conduct. Limitation of liability provisions should carve out wanton conduct claims.

PART VI: INSURANCE REQUIREMENTS

6.1 General Insurance Requirements

CLAUSE 6.1 — INSURANCE REQUIREMENTS

[________________________________] ("Insured Party") shall, at its sole cost and expense, obtain and maintain throughout the term of this Agreement, and for a period of [____] years thereafter, the following insurance coverages with carriers rated no less than "A-" (VII) by A.M. Best Company:

(a) Commercial General Liability Insurance:

☐ Each-occurrence limit: $[________________________________]

☐ General aggregate limit: $[________________________________]

☐ Products-completed operations aggregate: $[________________________________]

☐ Personal and advertising injury: $[________________________________]

Coverage shall include premises-operations, products-completed operations, contractual liability (including coverage for the indemnification obligations assumed under this Agreement), broad form property damage, and independent contractors.

(b) Professional Liability (Errors and Omissions) Insurance:

☐ Each-claim limit: $[________________________________]

☐ Annual aggregate limit: $[________________________________]

☐ Retroactive date: No later than [__/__/____]

(c) Workers' Compensation and Employers' Liability Insurance:

☐ Workers' Compensation: Statutory limits as required by the Alabama Workers' Compensation Act (Ala. Code § 25-5-1 et seq.)

☐ Employers' Liability:
- Each accident: $[________________________________]
- Disease — policy limit: $[________________________________]
- Disease — each employee: $[________________________________]

(d) Commercial Automobile Liability Insurance:

☐ Combined single limit: $[________________________________]

Coverage shall include owned, hired, and non-owned vehicles.

(e) Umbrella/Excess Liability Insurance:

☐ Each-occurrence limit: $[________________________________]

☐ Annual aggregate limit: $[________________________________]

6.2 Additional Insured Requirements

CLAUSE 6.2 — ADDITIONAL INSURED

[________________________________] ("Additional Insured") shall be named as an additional insured on all commercial general liability, commercial automobile liability, and umbrella/excess liability insurance policies maintained by [________________________________] ("Named Insured") under this Agreement, using ISO Additional Insured endorsement CG 20 10 (or equivalent) for ongoing operations and CG 20 37 (or equivalent) for completed operations.

The additional insured coverage shall:

(a) Be primary and non-contributory with respect to any other insurance or self-insurance maintained by the Additional Insured;

(b) Apply on a per-project basis, where applicable;

(c) Include a waiver of subrogation in favor of the Additional Insured; and

(d) Not be limited by any limitation of liability set forth in this Agreement.

6.3 Waiver of Subrogation

CLAUSE 6.3 — WAIVER OF SUBROGATION

Each party shall cause its insurers to waive all rights of subrogation against the other party and its officers, directors, employees, and agents with respect to any claims covered by the insurance policies required under this Agreement. Each party shall obtain from its insurers written endorsements confirming such waiver of subrogation.

6.4 Certificates of Insurance

CLAUSE 6.4 — CERTIFICATES AND EVIDENCE OF INSURANCE

[________________________________] shall deliver to [________________________________] certificates of insurance evidencing all required coverages prior to the commencement of any work or services under this Agreement, and annually thereafter upon renewal. Certificates shall:

(a) Identify the named insured, policy numbers, policy periods, and coverage limits;

(b) Confirm additional insured status, waiver of subrogation, and primary/non-contributory status;

(c) Provide that the insurer shall endeavor to provide [____] days' prior written notice to the certificate holder of any cancellation, non-renewal, or material change in coverage; and

(d) Be accompanied by copies of all required endorsements upon request.

PART VII: ALABAMA-SPECIFIC PRACTICE NOTES

7.1 Contributory Negligence System

Alabama is one of only four states (along with Maryland, North Carolina, and Virginia) that follows the doctrine of pure contributory negligence rather than comparative fault. Under this doctrine:

• A plaintiff's own negligence, however slight, completely bars recovery (unless the defendant's conduct was willful or wanton).
• The "last clear chance" doctrine may apply in limited circumstances to allow recovery despite the plaintiff's contributory negligence.
• Indemnification provisions should be drafted with the contributory negligence framework in mind, as this may affect the allocation of risk between the parties.

7.2 Joint and Several Liability

Alabama retains joint and several liability for concurrent tortfeasors. Where two or more defendants are jointly and severally liable, any one defendant may be held liable for the entire amount of the plaintiff's damages, regardless of that defendant's proportionate share of fault. This makes indemnification and contribution provisions particularly important in Alabama.

7.3 Statute of Limitations Considerations

• Written contract claims: Six (6) years (Ala. Code § 6-2-34)
• Oral contract claims: Six (6) years (Ala. Code § 6-2-34)
• Tort claims (general): Two (2) years (Ala. Code § 6-2-38)
• Fraud claims: Two (2) years from discovery (Ala. Code § 6-2-3)
• Construction claims: Subject to the statute of repose (Ala. Code § 6-5-221) — actions against architects, engineers, or builders for defective or unsafe conditions must be commenced within seven (7) years after substantial completion.

7.4 Jury Waiver Enforceability

Alabama courts have recognized the enforceability of pre-dispute jury waivers in commercial contracts, provided the waiver is knowing and voluntary. The Alabama Constitution (Art. I, § 11) guarantees the right to trial by jury, so waiver provisions should be:

☐ Conspicuously placed (capitalized, bold, or separate signature line)

☐ Mutual (both parties waive)

☐ Supported by evidence of voluntary and knowing consent

7.5 Drafting Checklist

☐ Verify that indemnification provisions requiring indemnification for the indemnitee's own negligence use clear and unambiguous language

☐ Confirm that the indemnitor understands and acknowledges the scope of indemnification obligations

☐ Ensure that limitation of liability provisions carve out willful and wanton misconduct (unenforceable in Alabama)

☐ Consider Alabama's contributory negligence framework when drafting fault-allocation provisions

☐ Verify that corporate indemnification provisions comply with Ala. Code §§ 10A-2-8.50 through 10A-2-8.58

☐ Verify insurance requirements meet Alabama-specific minimums (including Alabama Workers' Compensation under Ala. Code § 25-5-1 et seq.)

☐ Include appropriate survival provisions for post-termination indemnification obligations

☐ Verify that advancement of expenses provisions include the required affirmation and undertaking under § 10A-2-8.53

☐ Ensure that indemnification and limitation of liability provisions are consistent with each other

☐ Consider including a supercap for data breach or security incidents where appropriate

SOURCES AND REFERENCES

1. Ala. Code §§ 10A-2-8.50 through 10A-2-8.58 — Alabama Business and Nonprofit Entities Code, Division E: Indemnification
   - https://law.justia.com/codes/alabama/2017/title-10a/chapter-2/article-8/division-e/

2. Ala. Code § 10A-2-8.56 — Indemnification of Officers, Employees, and Agents
   - https://law.justia.com/codes/alabama/title-10a/chapter-2/article-8/division-e/section-10a-2-8-56/

3. Ala. Code § 10A-2-8.58 — Application of Indemnification Provisions (Non-Exclusivity)
   - https://law.justia.com/codes/alabama/2012/title-10a/chapter-2/section-10a-2-8.58/

4. Ala. Code § 6-2-34 — Statute of Limitations (Contracts)
   - https://law.justia.com/codes/alabama/title-6/chapter-2/

5. Ala. Code § 6-5-221 — Statute of Repose (Construction)
   - https://law.justia.com/codes/alabama/title-6/chapter-5/

6. Ala. Code § 25-5-1 et seq. — Alabama Workers' Compensation Act
   - https://law.justia.com/codes/alabama/title-25/chapter-5/

7. Industrial Tile, Inc. v. Stewart, 388 So. 2d 171 (Ala. 1980) — Standard for indemnification of indemnitee's own negligence

8. Alabama Anti-Indemnity Status — Alabama does not have an anti-indemnity statute
   - https://www.sdvlaw.com/surveys/construction-anti-indemnity-statutes/

This clause pack is provided for informational purposes only and does not constitute legal advice. It must be reviewed and customized by a qualified attorney licensed in Alabama before use. Laws change frequently; all citations should be verified against current statutes before relying on this document.

Prepared for use on the ezel.ai platform. For solo practitioners licensed in Alabama.