KCA opposes HB 1541, citing anti-business impacts and increased construction litigation

Listen to this article

Citing anti-business impacts and increased construction litigation, the Keystone Contractors Association (KCA) announced its opposition to House Bill 1541. 

KCA warned that the anti-indemnification in construction legislation would undermine Pennsylvania‘s business climate, discourage investment, and significantly increase construction-related litigation.

The PA General Assembly site lists HB 1541 as bipartisan legislation “amending the act of July 9, 1970 (P.L.484, No.164), entitled “An act relating to indemnification agreements between architects, engineers or surveyors and owners, contractors, subcontractors or suppliers and indemnification agreements relating to snow removal or ice control services,” providing for void and unenforceable provisions or terms in construction contracts and for insurance coverage for additional insureds; and making editorial changes.” 

Fastdemocracy.com said the bill “amends the existing law regarding indemnification agreements between architects, engineers, surveyors, and various parties involved in construction contracts.” The title of the act is updated to include “indemnification agreements relating to construction contracts,” while removing references to snow removal or ice control services. HB 1541 introduces provisions that declare certain terms in construction contracts void and unenforceable, specifically those that indemnify a party for damages resulting from their own negligence. It defines “construction contract” and “party” to clarify the scope of the law, per Fastdemocracy.com.

HB 1541 also establishes guidelines for insurance coverage for additional insureds in construction contracts. It states that if an additional insured is added to a general liability insurance policy before any loss occurs, the coverage must not exceed what is required by the construction contract. Per Fastdemocracy.com, HB 1541 defines “additional insured” and reiterates the definition of “construction contract” for consistency.

KCA represents construction contractors and industry partners across Pennsylvania who build the commercial, industrial, and infrastructure that support economic growth and job creation. KCA said HB 1541 moves Pennsylvania in the wrong direction at a time when the state should be working to attract commerce and remain competitive with neighboring states. 

“House Bill 1541 is anti-business and sends exactly the wrong signal to employers, developers and investors considering Pennsylvania,” KCA Executive Director Jon O’Brien said in a statement. “Instead of encouraging growth and collaboration, this bill would increase legal uncertainty and expose construction projects to greater risk.” 

The legislation would lead to more construction litigation, driving up costs, delaying projects and diverting resources away from building and job creation, KCA stated in a release. The added costs would be passed on to taxpayers, businesses, and consumers. 

“Pennsylvania’s construction industry thrives when there is clarity, fairness and predictability,” said O’Brien. “HB 1541 creates the opposite – inviting more lawsuits, higher costs and slows projects moving forward.” 

Concern was also expressed by the KCA that the bill could slow or deter much-needed commercial development, housing, infrastructure projects and energy projects which sustain thousands of construction jobs across Pennsylvania. 

“KCA urges lawmakers to reject House Bill 1541 and instead work collaboratively with the construction and business community on policies that strengthen Pennsylvania’s economy and keep our state competitive,” said O’Brien. 

The KCA represents construction companies based across Pennsylvania, advocating for policies that promote business growth in Pennsylvania, workforce development and a sustainable construction industry.