Knock-for-Knock: A Primer

In construction contracts, you’ll often see knock-for-knock indemnity provisions: each party agrees to be responsible for injuries to its own employees—even if someone else was negligent. At first glance, that might seem like the kind of term that only someone with a lot of bargaining power can push through. But in reality, these provisions benefit both sides of the deal, and courts and legislators recognize that.

So why does this approach make sense for everyone? Here’s a primer:

What is Knock-for-Knock Indemnity?

In simple terms, knock-for-knock means: you take care of your people, and I’ll take care of mine. If your employee gets hurt on the job—even if I caused it—you don’t sue me. Instead, your insurance (usually workers’ comp) covers the loss, and you indemnify me if I get pulled into a lawsuit.

It’s not about assigning fault. It’s about assigning responsibility—who handles the claim, who pays for it, and who keeps the wheels turning while lawyers figure it out.

Why it’s Good for Both Parties

Incentive Alignment

Employers tend to have the most control over whether their employees are adequately trained and are taking proper precautions on the jobsite. Knock-for-knock incentives employers to make sure their own employees are working safely by eliminating any finger-pointing.

Predictability

Lawsuits are unpredictable. Was it the GC’s unsafe scaffolding? The subcontractor’s lack of fall protection? The owner’s poor site design? With knock-for-knock, it doesn’t matter. Everyone knows up front who handles what. That stability is good for owners, GCs, and subs—especially on complex, multi-party projects.

Speed and Simplicity

When someone gets hurt, no one wants to be tied up in months of discovery just figuring out which party was 22% at fault. Knock-for-knock gets the claim routed to the right insurer quickly (i.e., the employer’s workers’ comp), without the blame game.

Insurance Alignment

These clauses work hand-in-glove with Texas’s workers’ compensation system. If both parties have workers’ comp coverage, the system should work exactly as intended: the injured worker gets benefits, the employer avoids litigation, and the project keeps moving. Now, yes, the injured employee can still sue a negligent third party (since the employee isn’t a party to the knock-for-knock agreement. Setting aside the many ways in which insurance may still cover such claims (e.g., additional insured & covered contract clauses under CGL policies), knock-for-knock still fairly allocates risks in those instances by imposing reciprocal indemnity obligations on the parties.

Less Litigation, Lower Costs

Many lawsuits come down to who’s going to foot the bill. Knock-for-knock clauses reduce litigation by taking that question off the table. Fewer indemnity and allocation-of-liability fights mean lower legal spend for everyone.