North Carolina · Risk

North Carolina indemnity clauses: what you can and can't be made to cover

The indemnity paragraph is usually the scariest thing in a subcontract, a wall of text saying you'll cover everyone for everything. In North Carolina it has less bite than it reads. Here's where the line falls.

By Bryce, founder of Contracts Insider · Reviewed July 2026 · About a 6-minute read · General guidance, not legal advice

Short answer: A North Carolina subcontract can make you cover losses caused by your own work, but it can't force you to cover the general contractor's own negligence. Under the anti-indemnity law (G.S. 22B-1), a clause that tries to is void to that extent. So "hold harmless from any and all claims" is narrower than it looks, you carry your share of the blame, not theirs.

What an indemnity clause is

To indemnify someone is to agree to cover their losses, including the legal costs of defending a claim. In a subcontract, the indemnity (or "hold harmless") clause usually runs one way: you agree to protect the GC if something goes wrong on the job. Written broadly, it can read as though you're on the hook for anything and everything, even a problem you had no hand in.

The North Carolina rule: you can't be made to cover their negligence

North Carolina draws a firm line here. Under G.S. 22B-1, a clause in a construction contract that requires you to indemnify the other side for damage caused by their own negligence is against public policy and void. So if the GC's crew causes the damage, a clause trying to push that cost onto you won't stand up.

What you can still be held to

The flip side is fair enough: you can be required to cover losses caused by your own fault, or the fault of your workers and any lower-tier subs. The indemnity holds to the extent your work is a proximate cause of the loss. In plain terms, you own your mistakes, not the GC's, and not those of the trade working next to you.

Why the broad wording still matters

Even though a court would read an over-broad clause back down to what's enforceable, that doesn't mean you should sign it and shrug. A sweeping "any and all claims" clause invites a fight later about who caused what, and fights cost time and money even when you're right. Far better to get the wording tightened to your own fault before you sign, so there's nothing to argue about.

The catch most contractors miss: insurance. The anti-indemnity law doesn't touch insurance. G.S. 22B-1 leaves insurance contracts, workers' compensation, and lien and bond claims alone. So a GC can still require you to name them as an "additional insured" on your policy, which shifts risk onto your insurer in a way the indemnity rule doesn't block. Read the insurance section as closely as the indemnity clause, because that's often where the real risk transfer happens.

What to check before you sign

Look for the words "sole negligence" or wording that ties your obligation to your own fault, that's the fair version. Be wary of a clause that has you indemnify the GC for claims "arising out of the work" with no link to who was actually at fault, and check what the insurance and additional-insured requirements ask of you alongside it. If the indemnity and insurance terms together feel one-sided on a job with real exposure, that's a sensible point to run past a licensed North Carolina construction attorney.

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Not legal advice. Contracts Insider is an educational tool that helps you spot common risks and ask better questions. It doesn't create an attorney–client relationship and doesn't replace a licensed construction attorney. State law varies and changes, and the notes here are general and current only to their last review. When real money or real risk is on the line, get the contract reviewed by a professional in your state.