CONTRACTOR’S DUTY TO DEFEND: Superior Court holds that business subject to same standards for defense and indemnification applicable to insurance companies

This action involved a defense and indemnity provision contained within a subcontract related to the construction of a Middletown power project.  The agreement provided in relevant part that the subcontractor would “to the fullest extent permitted by law … defend, indemnify and hold harmless” the plaintiff and its employees against all losses arising from third-party claims that directly or indirectly arise out of or result from the subcontractor’s failure to comply with applicable law.

In reviewing the issue, the court states that it finds persuasive several decisions of the Superior Court “which have held that our jurisprudence regarding indemnification in the context of insurance contracts applies equally to contracts between sophisticated business entities.”

The court then goes on to apply the typical duty to defend analysis, looking to the allegations in the underlying complaint.  In performing that analysis, the court finds that there were no allegations in the underlying complaint against the subcontractor.

The court concludes that there were no allegations in the underlying complaint that possibly directly or indirectly arose out of or resulted from the subcontractor’s failure to comply with applicable law.  Accordingly, no duty to defend existed. 

Gemma Power Systems, LLC v. Smedley Co., 2017 WL 3927642 (Conn. Super. 7/26/17).