Indemnification is an important concept in personal injury law. Basically, if A indemnifies B, and C sues B for negligence and wins, B can then sue A to recover some or all of the cost of paying the damage award to C. Business contracts often contain indemnification clauses to address potential personal injury lawsuits arising from the relationship.
CSX Transportation, Inc. v. General Mills, Inc.
Here is a recent example of how courts apply Georgia law to indemnification clauses. This dispute involved an alleged breach of contract. The parties were CSX Transportation, the railroad company, and cereal manufacturer General Mills, which operates a plant in Newton County. General Mills hired CSX to construct a private “sidetrack” connecting its plant with CSX’s main railroad line. Under the agreement, General Mills had the right to handle some of the “switching” operations—the process of moving and connecting railroad cars to a train—independent of CSX. Accordingly, the contract contained an indemnification clause whereby General Mills “assume[d] all risk of loss, damage, cost, liability, judgment and expense (including attorneys’ fees) in connection with any personal injury” arising from any switching it oversaw.