• Jun 09, 2023
FACT passes Indemnication bill

SB 1766 Sen. Creighton/Rep. Paul ensures that appraisers cannot be held liable for the negligence or mistakes made by a local governmental entity by making such contract provisions void and unenforceable. Every party to a contract should be responsible for their faults if their negligence or mistake leads to litigation.

The bill was introduced to protect appraisers when they work with local governmental agencies – cities, counties, school districts and the like. Sometimes governmental entities include provisions in the Requests for Proposals and/or terms of a contract that require professional appraisers to indemnify or defend a governmental entity against liability for damages other than those caused by the appraiser—even when the potential damages arise from the actions of the governmental entity itself. Requiring appraisers to defend their employers through such contractual provisions in a professional services contract is typically uninsurable under a professional liability insurance policy. Appraisers that are small businesses cannot afford the significant legal expense of a duty to defend a governmental entity. Additionally, since appraisals are contemporaneously reviewed by all parties at the time of closing, there is little to sue over after the fact.

SB 1766 passed and was signed into law by the Governor on 5-23-23, and will take effective on 9-1-23.

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