In Nevada, unlike many other states, Courts will not intervene to blue pencil terms into an indemnity agreement. For example, in California, all indemnity agreements are constrained by California Civil Code 2778, which, among other requirements, writes into every indemnity agreement a duty to defend regardless of the terms of the agreement.
In contrast to California, the Nevada Supreme Court has noted and held that, “since Nevada has not adopted an anti-indemnity statute, parties have great freedom in allocating indemnification responsibilities between one another.” Reyburn Lawn & Landscape Designers, Inc. v. Plaster Dev. Co., 255 P.3d 268, 274 (Nev. 2011). Nevada’s Legislature has elected to not intervene in the terms of indemnity agreements, unlike California.
In fact, in the absence of an anti-indemnity statute, the Nevada Supreme Court has made it clear that the terms of an indemnity agreement will be strictly construed:
Unlike an insurance agreement, which typically requires an insurer to defend all claims against the insured regardless of the claim’s merit, see Thibodaux v. Southern Natural Gas Co., 705 So. 2d 1287, 1289 (La. Ct. App. 1998), the duty to defend outlined in an indemnification provision is subject to strict construction of the contract language. Prince v. Pacific Gas & Elec. Co., 45 Cal. 4th 1151, 90 Cal. Rptr. 3d 732, 202 P.3d 1115, 1120 (Cal. 2009) (“In the context of noninsurance indemnity agreements, if a party seeks to be indemnified its own active negligence, or regardless of the indemnitor’s fault, the contractual language on the point must be particularly clear and explicit, and will be construed strictly against the indemnitee.” (internal quotations omitted)); Crawford, 187 P.3d at 430 (“Though indemnity agreements resemble liability insurance policies, rules for interpreting the two classes of contracts do differ significantly.”); Reyburn, 127 Nev. at , 255 P.3d at 277 (contrasting “an insurer’s duty to defend under an insurance policy” with “the duty to defend arising from an indemnity clause”).
United Rentals Highway Techs., Inc. v. Wells Cargo, Inc., 289 P.3d 221, 228-229 (Nev. . Further, the Nevada Supreme Court has held that when construing indemnity agreements, the Court must, “refus[e] to ‘attempt to increase the legal obligations of the parties where the parties intentionally limit[ ] such obligations.'” United Rentals at 227 quoting Griffin v. Old Republic Ins. Co., 122 Nev. 479, 483, 133 P.3d 251, 254 (2006) (quoting Senteney v. Fire Ins. Exchange, 101 Nev. 654, 656, 707 P.2d 1149, 1150-51 (1985)). When construing the terms of an indemnity agreement, the Court should construe against the indemnitee because, in non-insurance contexts, “it is the indemnitee who may often have superior bargaining power, and who may use this power unfairly to shift to another a disproportionate share of the financial consequences of its own legal fault.” United Rentals at 229. quoting Crawford v. Weather Shield Mfg., Inc., 187 P.3d 424, 430 (Cal. 2008).
In taking the position that indemnity agreements must be strictly construed, the Nevada Supreme Court has held that, “unless specifically otherwise stated in the indemnity clause, an indemnitor’s duty to defend an indemnitee is limited to those claims directly attributed to the indemnitor’s scope of work and does not include defending against claims arising from the negligence of other subcontractors or the indemnitee’s own negligence.” Reyburn at 278.