Indemnity and Liability Clause Pack - Texas

INDEMNITY AND LIABILITY CLAUSE PACK — TEXAS

Jurisdiction: State of Texas
Governing Law: Texas Business Organizations Code; Texas Insurance Code; Texas Civil Practice and Remedies Code; Texas 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: Texas-Specific Practice Notes
• Sources and References

PART I: LEGAL FRAMEWORK

1.1 Texas Corporate Indemnification Statutes

Texas corporate indemnification is governed by Chapter 8 of the Texas Business Organizations Code (BOC), which provides a comprehensive framework for mandatory indemnification, permissive indemnification, court-ordered indemnification, and advancement of expenses. The BOC applies to corporations, limited liability companies, and other entities organized under Texas law, though certain provisions apply only to specific entity types.

Statutory Structure:

Key provisions:

• Mandatory indemnification (§ 8.051): An enterprise shall indemnify a governing person, former governing person, or delegate against reasonable expenses actually incurred by the person in connection with a proceeding in which the person is a respondent because the person is or was a governing person or delegate, if the person is wholly successful, on the merits or otherwise, in the defense of the proceeding. This mandatory indemnification applies unless limited by the governing documents under § 8.003.

• Permissive indemnification (§ 8.101): An enterprise may indemnify a governing person, former governing person, or delegate who was, is, or is threatened to be made a respondent in a proceeding, to the extent permitted by § 8.102, if it is determined under § 8.103 that the person: (1) acted in good faith; (2) reasonably believed (in the case of conduct in an official capacity) that the conduct was in the enterprise's best interests, or (in all other cases) that the conduct was not opposed to the enterprise's best interests; (3) in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful; and (4) the amount of expenses (other than a judgment) is reasonable.

• Scope of permissive indemnification (§ 8.102): An enterprise may indemnify against expenses (other than a judgment) that are reasonable and actually incurred in connection with a proceeding. An enterprise may not indemnify a person against a judgment in a proceeding in which the person is found liable to the enterprise, or for an amount paid in settlement of such a proceeding, unless a court determines indemnification is fair and reasonable.

• Determination procedure (§ 8.103): The good faith and other determinations required under § 8.101 must be made by: (a) a majority vote of the governing persons who are disinterested and independent; (b) a majority vote of a committee designated by such governing persons; (c) special legal counsel; or (d) the owners or members of the enterprise.

• Advancement of expenses (§ 8.104): An enterprise may pay or reimburse reasonable expenses in advance of final disposition upon receipt of: (a) a written affirmation of the person's good faith belief that the person has met the standard of conduct; and (b) a written undertaking to repay if the person does not meet the standard. For former governing persons or delegates, the enterprise may pay or reimburse under similar conditions.

• Insurance (§ 8.151): An enterprise may purchase and maintain insurance or another arrangement on behalf of any person who is or was a governing person, delegate, officer, or employee against any liability asserted against and incurred by the person in that capacity, whether or not the enterprise would have the power to indemnify the person under Chapter 8.

• Limitations (§ 8.003): A governing document of an enterprise may restrict the circumstances under which the enterprise must or may indemnify or advance expenses.

1.2 Common Law Indemnity in Texas

Texas recognizes both express and implied indemnity:

• Express indemnity: Texas courts enforce contractual indemnity agreements, including provisions requiring indemnification for the indemnitee's own negligence, provided the agreement complies with the "express negligence doctrine" and the "conspicuousness requirement" established in Ethyl Corp. v. Daniel Construction Co., 725 S.W.2d 705 (Tex. 1987).
• The Express Negligence Doctrine: A party seeking to be indemnified from the consequences of its own negligence must express that intent in specific terms within the four corners of the contract. General or broad indemnity language is insufficient.
• The Conspicuousness Requirement: The indemnification provision must be conspicuous — it must be presented in a manner that a reasonable person against whom it operates would notice it (e.g., bold, capitalized, or otherwise distinguishable from surrounding text).
• Implied indemnity: Texas recognizes implied indemnity in limited circumstances involving a right to reimbursement from the person actually causing the harm.

1.3 Contractual Indemnity Under Texas Law

Texas enforces contractual indemnity provisions subject to:

• Express negligence doctrine and conspicuousness (Ethyl Corp.).
• Fair notice requirement under Dresser Industries, Inc. v. Page Petroleum, Inc., 853 S.W.2d 505 (Tex. 1993) — the indemnity provision must give "fair notice" that one party is agreeing to indemnify the other for the other's own negligence.
• Anti-indemnity statutes in construction (Tex. Ins. Code Ch. 151, Subchapter C) and oilfield operations (CPRC Ch. 127).
• Comparative fault under Tex. Civ. Prac. & Rem. Code § 33.001 et seq., which affects the allocation of liability among parties.

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, by reason of the fact that such person is or was a governing person (as defined in Tex. Bus. Orgs. Code § 1.002) or officer of the Corporation, or is or was serving at the request of the Corporation as a governing person, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another enterprise, to the fullest extent permitted by Tex. Bus. Orgs. Code Chapter 8, as the same exists or may hereafter be amended, against reasonable expenses (including attorney fees), judgments, fines, penalties, and amounts paid in settlement actually incurred in connection with such action, suit, or proceeding.

Mandatory Component (BOC § 8.051): Unless limited by the Certificate of Formation, the Corporation shall indemnify a governing person, former governing person, or delegate who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which such person was a respondent because of being a governing person or delegate, against reasonable expenses actually incurred in connection with the proceeding.

Court-Ordered Indemnification (BOC § 8.052): A court that determines, in a suit for which indemnification is sought, that a governing person, former governing person, or delegate is entitled to indemnification under BOC § 8.051 shall order indemnification and award to the person the expenses incurred in securing the indemnification.

2.2 Permissive Indemnification Resolution

CLAUSE 2.2 — BOARD RESOLUTION FOR PERMISSIVE INDEMNIFICATION

RESOLVED, that the Corporation may indemnify [________________________________] ("Indemnitee") against reasonable expenses actually incurred in connection with [________________________________] (the "Proceeding"), subject to the following:

(a) The required determination has been made under BOC § 8.103 by:

☐ A majority vote of the governing persons who at the time of the vote are disinterested and independent (even if less than a quorum)

☐ A majority vote of a committee of the governing authority designated by a majority vote of the disinterested and independent governing persons

☐ Special legal counsel selected by the governing authority or committee

☐ The shareholders

(b) Indemnitee acted in good faith;

(c) In the case of conduct in Indemnitee's official capacity, Indemnitee reasonably believed the conduct was in the best interests of the Corporation;

(d) In all other cases, Indemnitee reasonably believed the conduct was not opposed to the best interests of the Corporation;

(e) In the case of any criminal proceeding, Indemnitee had no reasonable cause to believe the conduct was unlawful; and

(f) The amount of expenses (other than a judgment) is reasonable.

Limitation (BOC § 8.102): The Corporation may not indemnify Indemnitee against a judgment in a proceeding in which Indemnitee is found liable to the Corporation, or for an amount paid in settlement of such a proceeding, unless a court of competent jurisdiction determines that, in view of all relevant circumstances, indemnification is fair and reasonable, and then only to the extent that the court considers proper.

2.3 Advancement of Expenses

CLAUSE 2.3 — ADVANCEMENT OF EXPENSES

For Present Governing Persons (BOC § 8.104): The Corporation shall pay or reimburse reasonable expenses incurred by a present governing person or delegate who was, is, or is threatened to be made a respondent in a proceeding in advance of the final disposition of the proceeding, without making the determinations required under BOC § 8.101(a), upon receipt of:

(a) A written affirmation by the person of the person's good faith belief that the person has met the standard of conduct necessary for indemnification under Chapter 8; and

(b) A written undertaking by or on behalf of the person to repay the amount paid or reimbursed if the final determination is that the person has not met the standard of conduct or that indemnification is prohibited by BOC § 8.102.

The undertaking required above must be an unlimited general obligation of the person but need not be secured and may be accepted without reference to the financial ability of the person to make repayment.

For Former Governing Persons (BOC § 8.104): The Corporation may pay or reimburse reasonable expenses incurred by a former governing person or delegate under the same conditions.

2.4 Directors and Officers Insurance

CLAUSE 2.4 — D&O INSURANCE AUTHORIZATION

Pursuant to BOC § 8.151, the Corporation may purchase and maintain insurance or another arrangement on behalf of any person who is or was a governing person, delegate, officer, or employee of the Corporation, or who is or was serving at the request of the Corporation in another enterprise, against any liability asserted against and incurred by the person in that capacity or arising from the person's status as such, regardless of whether the Corporation would have the power to indemnify the person under Chapter 8.

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 Limitations in Governing Documents

CLAUSE 2.5 — GOVERNING DOCUMENT PROVISIONS

Pursuant to BOC § 8.003, the Certificate of Formation or other governing documents of the Corporation may restrict the circumstances under which the Corporation must or may indemnify or may advance expenses to a person under Chapter 8. The Corporation confirms that:

☐ The Certificate of Formation contains no restrictions on indemnification beyond those imposed by Chapter 8

☐ The Certificate of Formation restricts indemnification as follows: [________________________________]

The rights to indemnification and advancement of expenses conferred by this Article are intended to be the maximum rights permitted under the BOC and shall continue as to a person who has ceased to be a governing person, officer, or delegate, and shall inure to the benefit of the heirs, executors, and administrators of such person.

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.

Texas Practice Note — Express Negligence Doctrine: Under Ethyl Corp. v. Daniel Construction Co., 725 S.W.2d 705 (Tex. 1987), a party seeking to be indemnified from the consequences of its own negligence must express that intent in specific terms within the four corners of the contract. This mutual indemnification clause limits each party's obligations to Losses arising from the Indemnifying Party's own conduct, consistent with the express negligence doctrine.

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 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 relevant pleadings, correspondence, or 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.

(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 a conflict of interest makes 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; 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, 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, the Indemnified Party shall deliver a written notice 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.

(b) Response. The Indemnifying Party shall respond 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, 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.

Texas Practice Note — Conspicuousness Requirement: Under Ethyl Corp. v. Daniel Construction Co. and Dresser Industries, Inc. v. Page Petroleum, Inc., limitation of liability provisions that effectively indemnify a party from its own negligence must satisfy the express negligence doctrine and the conspicuousness requirement. This provision is presented in bold/capitalized text to satisfy the conspicuousness requirement. Texas courts generally enforce consequential damages waivers in commercial contracts between sophisticated parties. Under Texas UCC (Tex. Bus. & Com. Code § 2.719(c)), limitation of consequential damages for personal injury in consumer goods cases is prima facie unconscionable.

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;

(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.

Optional Supercap for Excluded Claims:

☐ Notwithstanding the foregoing, each party's total cumulative liability for Excluded Claims shall not exceed [____] times the liability cap set forth in Section 4.2 (or $[________________________________], whichever is greater).

4.4 Enforceability Under Texas 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 and are a material inducement for each party to enter into this Agreement. If any limitation or exclusion is found to be unenforceable under Texas law, it shall be reformed to the minimum extent necessary to make it enforceable.

Texas Enforceability Notes:

• Texas courts enforce contractual limitation of liability provisions between sophisticated commercial parties, provided they satisfy the express negligence doctrine and conspicuousness requirement where applicable.
• Limitations of liability for willful misconduct, fraud, or intentional torts are generally unenforceable.
• Texas follows a modified comparative fault system under CPRC § 33.001 et seq. A claimant whose percentage of responsibility is greater than 50% is barred from recovery. Each defendant is liable only for its proportionate share of damages, except that joint and several liability applies to defendants whose percentage of responsibility is greater than 50%.
• CPRC § 33.002: The trier of fact determines the percentage of responsibility of each claimant, defendant, settling person, and responsible third party.

PART V: ANTI-INDEMNITY CONSIDERATIONS

5.1 Construction Anti-Indemnity Act (Tex. Ins. Code Ch. 151, Subchapter C)

The Texas Construction Anti-Indemnity Act, codified in Texas Insurance Code §§ 151.101 through 151.105, renders void certain indemnification provisions in construction contracts.

Key provisions:

§ 151.101 — Applicability: The subchapter applies to a "construction contract" for a "construction project," which is broadly defined to include construction, remodeling, maintenance, or repair of improvements to real property, other than a single-family house, townhouse, duplex, or land development directly related thereto. The Act applies to contracts related to a prime contract entered into on or after January 1, 2012.

§ 151.102 — Agreement Void and Unenforceable: A provision in a construction contract, or in an agreement collateral to or affecting a construction contract, is void and unenforceable as against public policy to the extent that it requires an indemnitor to indemnify, hold harmless, or defend a party, including a third party, against a claim caused by:

• The negligence or fault of the indemnitee, its agent or employee, or any third party under the control or supervision of the indemnitee (other than the indemnitor or its agents, employees, or subcontractors);
• The breach or violation of a statute, ordinance, governmental regulation, standard, or rule by the indemnitee, its agent or employee, or any third party under the control or supervision of the indemnitee; or
• The breach of contract by the indemnitee, its agent or employee, or any third party under the control or supervision of the indemnitee.

§ 151.103 — Exception (Employee Claims): Section 151.102 does not affect a provision that requires a person to indemnify, hold harmless, or defend another party against a claim for the bodily injury or death of an employee of the indemnitor, its agent, or its subcontractor.

§ 151.104 — Insurance: The Act does not prohibit a contract provision requiring the purchase of insurance coverage, including additional insured coverage, and the indemnitor's insurance policy may satisfy the indemnitor's indemnity obligations under the contract.

§ 151.105 — Preemption: The subchapter preempts and supersedes any local ordinance, order, or rule that provides for terms different from those prescribed by this subchapter.

5.2 Oilfield Anti-Indemnity Act (CPRC Ch. 127)

The Texas Oilfield Anti-Indemnity Act (TOAIA), codified in CPRC §§ 127.001 through 127.007, restricts indemnification provisions in agreements pertaining to wells for oil, gas, or water, or to mines for minerals.

Key provisions:

§ 127.003 — Void Agreements: A covenant, promise, or agreement in, collateral to, or affecting an agreement pertaining to a well or mine that purports to indemnify a person against loss or liability for damage arising from: (a) death or bodily injury to persons; or (b) damage or destruction of real or personal property, caused by or resulting from the sole or concurrent negligence of the indemnitee or an agent or employee of the indemnitee, is void and unenforceable.

§ 127.005 — Insurance Exception: Chapter 127 does not apply to an agreement that provides for indemnity if the parties agree in writing that the indemnity obligation will be supported by liability insurance coverage furnished by the indemnitor, subject to specific dollar limitations:

• Mutual indemnity: Limited to the extent of the coverage and dollar limits of insurance or qualified self-insurance each party has agreed to obtain for the benefit of the other party.
• Unilateral indemnity: The amount of insurance required may not exceed $500,000 per occurrence.

§ 127.006 — Workers' Compensation Insurance: The chapter does not apply to agreements for workers' compensation insurance benefits as required by the Texas Workers' Compensation Act.

5.3 Construction Contract Indemnity Clause (Texas-Compliant)

CLAUSE 5.3 — CONSTRUCTION INDEMNITY (COMPLIANT WITH TEX. INS. CODE § 151.102)

TO THE FULLEST EXTENT PERMITTED BY LAW, INCLUDING BUT NOT LIMITED TO THE TEXAS CONSTRUCTION ANTI-INDEMNITY ACT (TEX. INS. CODE §§ 151.101-151.105), 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, BUT NOT TO THE EXTENT CAUSED BY THE NEGLIGENCE, FAULT, BREACH OF STATUTE, OR BREACH OF CONTRACT OF OWNER, ITS AGENTS, EMPLOYEES, OR THIRD PARTIES UNDER THE CONTROL OR SUPERVISION OF OWNER.

THIS INDEMNIFICATION OBLIGATION SPECIFICALLY COVERS LOSSES ARISING FROM THE CONCURRENT NEGLIGENCE OF CONTRACTOR AND OWNER, BUT ONLY TO THE PROPORTIONATE EXTENT OF CONTRACTOR'S NEGLIGENCE OR FAULT.

IMPORTANT — TEXAS EXPRESS NEGLIGENCE DOCTRINE: This indemnification provision is intended to comply with the express negligence doctrine and the conspicuousness requirement of Texas law (Ethyl Corp. v. Daniel Construction Co., 725 S.W.2d 705 (Tex. 1987)). This provision is set forth in bold capitalized text to satisfy the conspicuousness requirement.

5.4 Oilfield Contract Indemnity Clause (CPRC Ch. 127-Compliant)

CLAUSE 5.4 — OILFIELD INDEMNITY (COMPLIANT WITH CPRC CH. 127)

THE PARTIES AGREE TO THE FOLLOWING MUTUAL INDEMNIFICATION, SUPPORTED BY INSURANCE AS REQUIRED BY CPRC § 127.005:

(a) OPERATOR SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS CONTRACTOR AND ITS EMPLOYEES, AGENTS, AND SUBCONTRACTORS FROM AND AGAINST ALL LOSSES ARISING FROM BODILY INJURY (INCLUDING DEATH) TO OPERATOR'S EMPLOYEES AND AGENTS, AND FROM DAMAGE TO OPERATOR'S PROPERTY, REGARDLESS OF CAUSE, INCLUDING THE CONCURRENT NEGLIGENCE OF CONTRACTOR.

(b) CONTRACTOR SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS OPERATOR AND ITS EMPLOYEES, AGENTS, AND SUBCONTRACTORS FROM AND AGAINST ALL LOSSES ARISING FROM BODILY INJURY (INCLUDING DEATH) TO CONTRACTOR'S EMPLOYEES AND AGENTS, AND FROM DAMAGE TO CONTRACTOR'S PROPERTY, REGARDLESS OF CAUSE, INCLUDING THE CONCURRENT NEGLIGENCE OF OPERATOR.

(c) INSURANCE REQUIREMENT (CPRC § 127.005): Each party agrees that its indemnity obligation under this Section shall be supported by liability insurance coverage, the minimum limits of which shall be: $[________________________________] per occurrence. For any unilateral indemnity obligation, the amount of insurance required shall not exceed $500,000 per occurrence as required by CPRC § 127.005(c).

NOTE: This knock-for-knock (mutual indemnity) structure complies with CPRC Chapter 127 because each party indemnifies for injuries to its own employees and damage to its own property, supported by the required insurance.

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, 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 Texas Workers' Compensation Act (Tex. Lab. Code Ch. 401 et seq.)

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

Texas Note: Texas does not require employers to carry workers' compensation insurance. However, non-subscriber employers lose certain common law defenses, including contributory negligence, fellow servant, and assumption of risk. Practitioners should verify whether the contracting party is a subscriber or non-subscriber.

(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, 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.

Texas Practice Note: The Texas Construction Anti-Indemnity Act (Tex. Ins. Code § 151.104) expressly permits contract provisions requiring the purchase of insurance coverage, including additional insured coverage. Insurance obligations are separate from and not restricted by the anti-indemnity provisions.

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.

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, 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: TEXAS-SPECIFIC PRACTICE NOTES

7.1 Express Negligence Doctrine and Conspicuousness

Under Texas law, indemnification for one's own negligence requires compliance with two doctrines:

(a) Express Negligence Doctrine (Ethyl Corp. v. Daniel Construction Co.): A party seeking to be indemnified from the consequences of its own negligence must express that intent in specific terms within the four corners of the contract. General language such as "any and all claims" is insufficient.

(b) Conspicuousness Requirement (Dresser Industries, Inc. v. Page Petroleum, Inc.): The indemnification provision must be "conspicuous" — presented in a manner that a reasonable person against whom it operates would notice it. Bold text, capitalization, contrasting colors, or separate signature blocks can satisfy this requirement.

7.2 Modified Comparative Fault

Texas follows a modified comparative fault system under CPRC § 33.001 et seq.:

• A claimant whose percentage of responsibility is greater than 50% is barred from recovery.
• Each defendant is liable only for the percentage of damages attributed to that defendant, except that a defendant whose percentage of responsibility is greater than 50% is jointly and severally liable.
• The trier of fact determines the percentage of responsibility for each claimant, defendant, settling person, and responsible third party (CPRC § 33.003).

7.3 Proportionate Responsibility

Under CPRC § 33.004, the court shall include responsible third parties in the determination of percentage of responsibility. This means that even parties not before the court may be allocated a share of fault, which can reduce the recovery against the defendants who are present. This affects indemnification and risk allocation strategies.

7.4 Statute of Limitations Considerations

• Written contract claims: Four (4) years (CPRC § 16.004)
• Oral contract claims: Four (4) years (CPRC § 16.004)
• Tort claims (general): Two (2) years (CPRC § 16.003)
• Construction defect claims: Subject to the statute of repose — ten (10) years after substantial completion for actions arising from a deficiency in the construction or repair of an improvement to real property (CPRC § 16.009)
• Contribution/indemnity: Two (2) years from date of payment or settlement

7.5 Jury Waiver Enforceability

Texas courts enforce pre-dispute jury waivers in commercial contracts, provided the waiver is knowing and voluntary. The Texas Constitution (Art. I, § 15) preserves the right to trial by jury. Practitioners should:

☐ Include conspicuous placement of the waiver (bold, capitalized, or separate acknowledgment)

☐ Ensure the waiver is mutual

☐ Include evidence that the waiver was a product of arm's-length negotiation

☐ Consider the Texas Arbitration Act (CPRC Ch. 171) as an alternative

7.6 Non-Subscriber Employers

Texas is the only state that does not require private employers to carry workers' compensation insurance. Non-subscriber employers:

• Lose the defenses of contributory negligence, assumption of risk, and fellow-servant rule
• Face potential liability for workplace injuries under negligence theories
• May be subject to additional contractual requirements from contracting parties mandating workers' compensation coverage

7.7 Drafting Checklist

☐ Verify that all indemnification provisions comply with the express negligence doctrine (Ethyl Corp.)

☐ Ensure conspicuousness of indemnification provisions that address the indemnitee's own negligence (bold, caps, or other distinguishing format)

☐ Verify that construction contract provisions comply with Tex. Ins. Code §§ 151.101-151.105

☐ Verify that oilfield contract provisions comply with CPRC §§ 127.001-127.007

☐ Ensure oilfield indemnity is supported by insurance as required by CPRC § 127.005

☐ Confirm that corporate indemnification provisions comply with Tex. Bus. Orgs. Code Chapter 8

☐ Verify whether the Certificate of Formation restricts indemnification under BOC § 8.003

☐ Determine whether the contracting party is a workers' compensation subscriber or non-subscriber

☐ Consider Texas's modified comparative fault system when allocating fault and structuring indemnification

☐ Verify insurance requirements and additional insured provisions are separate from indemnity (per Tex. Ins. Code § 151.104)

☐ Include appropriate survival provisions for post-termination indemnification obligations

☐ Ensure all optional provisions are appropriately selected and all bracketed fields are completed

SOURCES AND REFERENCES

1. Tex. Bus. Orgs. Code Chapter 8 — Indemnification and Insurance
   - https://statutes.capitol.texas.gov/Docs/BO/htm/BO.8.htm

2. BOC § 8.051 — Mandatory Indemnification
   - https://texas.public.law/statutes/tex._bus._orgs._code_section_8.051

3. BOC § 8.101 — Permissive Indemnification
   - https://texas.public.law/statutes/tex._bus._orgs._code_section_8.101

4. BOC § 8.104 — Advancement of Expenses
   - https://texas.public.law/statutes/tex._bus._orgs._code_section_8.104

5. Tex. Ins. Code §§ 151.101-151.105 — Construction Anti-Indemnity Act
   - https://statutes.capitol.texas.gov/Docs/IN/htm/IN.151.htm

6. Tex. Ins. Code § 151.102 — Agreement Void and Unenforceable
   - https://law.justia.com/codes/texas/insurance-code/title-2/subtitle-c/chapter-151/subchapter-c/section-151-102/

7. CPRC §§ 127.001-127.007 — Texas Oilfield Anti-Indemnity Act
   - https://statutes.capitol.texas.gov/Docs/CP/htm/CP.127.htm

8. CPRC § 33.001 et seq. — Proportionate Responsibility (Comparative Fault)
   - https://statutes.capitol.texas.gov/Docs/CP/htm/CP.33.htm

9. Ethyl Corp. v. Daniel Construction Co., 725 S.W.2d 705 (Tex. 1987) — Express negligence doctrine and conspicuousness requirement

10. Dresser Industries, Inc. v. Page Petroleum, Inc., 853 S.W.2d 505 (Tex. 1993) — Fair notice requirement for indemnity provisions

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 Texas 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 Texas.