In New York, even assuming that an indemnity provision of a construction contract was broad enough to require a contractor to indemnify a utility company from damages associated to the utility company’s own negligence, the indemnity provision will not apply unless there was an act or omission by the contractor resulting in the injury to persons or property. Furthermore, evidence that custom and practice was for the utility company to do all of the work in an excavation project which relates to gas and gas mains, an excavation contractor is under no duty to provide gas-testing equipment or to conduct tests for gas.

In Lopez v. Consolidated Edison Co. of New York (1976), employees who were injured by a natural gas explosion while performing excavation under a contract between their employer and a utility company brought a negligence action against the utility company. Consolidated Edison, the utility company, commenced a third-party action for full indemnification. Peckham, the construction company in which the plaintiffs worked for, entered into a lump sum contract with Consolidated Edison to furnish supervision, labor, materials and equipment necessary to excavate trenches and openings to install facilities to be furnished by Consolidated Edison. Although the contract indicated that the contractor was required to perform other work associated with gas and electric installations, it was specified that Consolidated Edison employees would insert and make connections for live gas lines. Employees of Peckham were injured when they entered a manhole that was initially said to be safe, due to the removal and capping of a gas line by Consolidated Edison that ran under the proposed location of the new manhole to be installed by Peckham employees. The testing for the presence of gas was not tested, and a spark caused the manhole to be consumed by fire fed by a slight gas line leak.

The indemnity provision in the contract was found to have no application unless there has been an act or omission by Peckham resulting in the injuries to the employees. Under the circumstances of the case, Peckham was under no duty to provide the technical equipment necessary to conduct tests for the presence of gas. Any work to be performed in connection with gas mains was to be closely supervised by Consolidated Edison. It was Consolidated Edison’s practice to have its employees test for the presence of gas before other employees resumed their work. It was held that the responsibility for testing for the present of gas was entirely of Consolidated Edison’s, because it alone had the experienced personnel and specialized equipment for handling gas-related difficulties. Consolidated Edison reserved for itself, both in the contract and in practice, the right and duty to perform gas line related work. The Court of Appeals of New York concluded that the contractor was under no duty to provide gas-testing equipment or to conduct testing for the presence of gas, even though Peckham may have assumed full responsibility for damages resulting for the work it was to perform without taking into account the fault of Consolidated Edison.