HOUSE BILL 10-1394
BY REPRESENTATIVE(S) Rice, Fischer, Gerou, Labuda, Swalm,
Carroll T., McFadyen;
also SENATOR(S) Scheffel, Carroll M., Gibbs, Tochtrop.
CONCERNING COMMERCIAL LIABILITY INSURANCE POLICIES ISSUED TO
CONSTRUCTION PROFESSIONALS.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. Part 8 of article 20 of title 13, Colorado Revised
Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:
13-20-808. Insurance policies issued to construction
professionals. (1) (a) THE GENERAL ASSEMBLY FINDS AND DETERMINES
THAT:
(I) THE INTERPRETATION OF INSURANCE POLICIES ISSUED TO
CONSTRUCTION PROFESSIONALS IS OF VITAL IMPORTANCE TO THE ECONOMIC
AND SOCIAL WELFARE OF THE CITIZENS OF COLORADO AND IN FURTHERING
THE PURPOSES OF THIS PART 8.
(II) INSURANCE POLICIES ISSUED TO CONSTRUCTION PROFESSIONALS
HAVE BECOME INCREASINGLY COMPLEX, OFTEN CONTAINING MULTIPLE,
NOTE: This bill has been prepared for the signature of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters indicate new material added to existing statutes; dashes through words indicate
deletions from existing statutes and such material not part of act.
LENGTHY ENDORSEMENTS AND EXCLUSIONS CONFLICTING WITH THE
REASONABLE EXPECTATIONS OF THE INSURED.
(III) THE CORRECT INTERPRETATION OF COVERAGE FOR DAMAGES
ARISING OUT OF CONSTRUCTION DEFECTS IS IN THE BEST INTEREST OF
INSURERS, CONSTRUCTION PROFESSIONALS, AND PROPERTY OWNERS.
(b) THE GENERAL ASSEMBLY DECLARES THAT:
(I) THE POLICY OF COLORADO FAVORS THE INTERPRETATION OF
INSURANCE COVERAGE BROADLY FOR THE INSURED.
(II) THE LONG-STANDING AND CONTINUING POLICY OF COLORADO
FAVORS A BROAD INTERPRETATION OF AN INSURER’S DUTY TO DEFEND THE
INSURED UNDER LIABILITY INSURANCE POLICIES AND THAT THIS DUTY IS A
FIRST-PARTY BENEFIT TO AND CLAIM ON BEHALF OF THE INSURED.
(III) THE DECISION OF THE COLORADO COURT OF APPEALS IN
GENERAL SECURITY INDEMNITY COMPANY OF ARIZONA V. MOUNTAIN STATES
MUTUAL CASUALTY COMPANY, 205 P.3d 529 (COLO. APP. 2009) DOES NOT
PROPERLY CONSIDER A CONSTRUCTION PROFESSIONAL’S REASONABLE
EXPECTATION THAT AN INSURER WOULD DEFEND THE CONSTRUCTION
PROFESSIONAL AGAINST AN ACTION OR NOTICE OF CLAIM CONTEMPLATED BY
THIS PART 8.
(IV) FOR THE PURPOSES OF GUIDING PENDING AND FUTURE ACTIONS
INTERPRETING LIABILITY INSURANCE POLICIES ISSUED TO CONSTRUCTION
PROFESSIONALS, WHAT HAS BEEN AND CONTINUES TO BE THE POLICY OF
COLORADO IS HEREBY CLARIFIED AND CONFIRMED IN THE INTERPRETATION
OF INSURANCE POLICIES THAT HAVE BEEN AND MAY BE ISSUED TO
CONSTRUCTION PROFESSIONALS.
(2) FOR THE PURPOSES OF THIS SECTION:
(a) “INSURANCE” HAS THE SAME MEANING AS SET FORTH IN SECTION
10-1-102, C.R.S.
(b) “INSURER” HAS THE SAME MEANING AS SET FORTH IN SECTION
10-1-102, C.R.S.
PAGE 2-HOUSE BILL 10-1394
(c) “INSURANCE POLICY” MEANS A CONTRACT OF INSURANCE.
(d) “LIABILITY INSURANCE POLICY” MEANS A CONTRACT OF
INSURANCE THAT COVERS OCCURRENCES OF DAMAGE OR INJURY DURING THE
POLICY PERIOD AND INSURES A CONSTRUCTION PROFESSIONAL FOR LIABILITY
ARISING FROM CONSTRUCTION-RELATED WORK.
(3) IN INTERPRETING A LIABILITY INSURANCE POLICY ISSUED TO A
CONSTRUCTION PROFESSIONAL, A COURT SHALL PRESUME THAT THE WORK
OF A CONSTRUCTION PROFESSIONAL THAT RESULTS IN PROPERTY DAMAGE,
INCLUDING DAMAGE TO THE WORK ITSELF OR OTHER WORK, IS AN ACCIDENT
UNLESS THE PROPERTY DAMAGE IS INTENDED AND EXPECTED BY THE
INSURED. NOTHING IN THIS SUBSECTION (3):
(a) REQUIRES COVERAGE FOR DAMAGE TO AN INSURED’S OWN WORK
UNLESS OTHERWISE PROVIDED IN THE INSURANCE POLICY; OR
(b) CREATES INSURANCE COVERAGE THAT IS NOT INCLUDED IN THE
INSURANCE POLICY.
(4) (a) UPON A FINDING OF AMBIGUITY IN AN INSURANCE POLICY, A
COURT MAY CONSIDER A CONSTRUCTION PROFESSIONAL’S OBJECTIVE,
REASONABLE EXPECTATIONS IN THE INTERPRETATION OF AN INSURANCE
POLICY ISSUED TO A CONSTRUCTION PROFESSIONAL.
(b) IN CONSTRUING AN INSURANCE POLICY TO MEET A
CONSTRUCTION PROFESSIONAL’S OBJECTIVE, REASONABLE EXPECTATIONS,
THE COURT MAY CONSIDER THE FOLLOWING:
(I) THE OBJECT SOUGHT TO BE OBTAINED BY THE CONSTRUCTION
PROFESSIONAL IN THE PURCHASE OF THE INSURANCE POLICY; AND
(II) WHETHER A CONSTRUCTION DEFECT HAS RESULTED, DIRECTLY
OR INDIRECTLY, IN BODILY INJURY, PROPERTY DAMAGE, OR LOSS OF THE USE
OF PROPERTY.
(c) IN CONSTRUING AN INSURANCE POLICY TO MEET A CONSTRUCTION
PROFESSIONAL’S OBJECTIVE, REASONABLE EXPECTATIONS, A COURT MAY
CONSIDER AND GIVE WEIGHT TO ANY WRITING CONCERNING THE INSURANCE
POLICY PROVISION IN DISPUTE THAT IS NOT PROTECTED FROM DISCLOSURE BY
PAGE 3-HOUSE BILL 10-1394
THE ATTORNEY-CLIENT PRIVILEGE, WORK-PRODUCT PRIVILEGE, OR ARTICLE
72 OF TITLE 24, C.R.S., AND THAT IS GENERATED, APPROVED, ADOPTED, OR
RELIED ON BY THE INSURER OR ITS PARENT OR SUBSIDIARY COMPANY; OR AN
INSURANCE RATING OR POLICY DRAFTING ORGANIZATION, SUCH AS THE
INSURANCE SERVICES OFFICE, INC., OR ITS PREDECESSOR OR SUCCESSOR
ORGANIZATION; EXCEPT THAT SUCH WRITING SHALL NOT BE USED TO
RESTRICT, LIMIT, EXCLUDE, OR CONDITION COVERAGE OR THE INSURER’S
OBLIGATION BEYOND THAT WHICH IS REASONABLY INFERRED FROM THE
WORDS USED IN THE INSURANCE POLICY.
(5) IF AN INSURANCE POLICY PROVISION THAT APPEARS TO GRANT OR
RESTORE COVERAGE CONFLICTS WITH AN INSURANCE POLICY PROVISION
THAT APPEARS TO EXCLUDE OR LIMIT COVERAGE, THE COURT SHALL
CONSTRUE THE INSURANCE POLICY TO FAVOR COVERAGE IF REASONABLY
AND OBJECTIVELY POSSIBLE.
(6) IF AN INSURER DISCLAIMS OR LIMITS COVERAGE UNDER A
LIABILITY INSURANCE POLICY ISSUED TO A CONSTRUCTION PROFESSIONAL,
THE INSURER SHALL BEAR THE BURDEN OF PROVING BY A PREPONDERANCE
OF THE EVIDENCE THAT:
(a) ANY POLICY’S LIMITATION, EXCLUSION, OR CONDITION IN THE
INSURANCE POLICY BARS OR LIMITS COVERAGE FOR THE INSURED’S LEGAL
LIABILITY IN AN ACTION OR NOTICE OF CLAIM MADE PURSUANT TO SECTION
13-20-803.5 CONCERNING A CONSTRUCTION DEFECT; AND
(b) ANY EXCEPTION TO THE LIMITATION, EXCLUSION, OR CONDITION
IN THE INSURANCE POLICY DOES NOT RESTORE COVERAGE UNDER THE
POLICY.
(7) (a) AN INSURER’S DUTY TO DEFEND A CONSTRUCTION
PROFESSIONAL OR OTHER INSURED UNDER A LIABILITY INSURANCE POLICY
ISSUED TO A CONSTRUCTION PROFESSIONAL SHALL BE TRIGGERED BY A
POTENTIALLY COVERED LIABILITY DESCRIBED IN:
(I) A NOTICE OF CLAIM MADE PURSUANT TO SECTION 13-20-803.5;
OR
(II) A COMPLAINT, CROSS-CLAIM, COUNTERCLAIM, OR THIRD-PARTY
CLAIM FILED IN AN ACTION AGAINST THE CONSTRUCTION PROFESSIONAL
PAGE 4-HOUSE BILL 10-1394
CONCERNING A CONSTRUCTION DEFECT.
(b) (I) AN INSURER SHALL DEFEND A CONSTRUCTION PROFESSIONAL
WHO HAS RECEIVED A NOTICE OF CLAIM MADE PURSUANT TO SECTION
13-20-803.5 REGARDLESS OF WHETHER ANOTHER INSURER MAY ALSO OWE
THE INSURED A DUTY TO DEFEND THE NOTICE OF CLAIM UNLESS AUTHORIZED
BY LAW. IN DEFENDING THE CLAIM, THE INSURER SHALL:
(A) REASONABLY INVESTIGATE THE CLAIM; AND
(B) REASONABLY COOPERATE WITH THE INSURED IN THE NOTICE OF
CLAIMS PROCESS.
(II) THIS PARAGRAPH (b) DOES NOT REQUIRE THE INSURER TO RETAIN
LEGAL COUNSEL FOR THE INSURED OR TO PAY ANY SUMS TOWARD
SETTLEMENT OF THE NOTICE OF CLAIM THAT ARE NOT COVERED BY THE
INSURANCE POLICY.
(III) AN INSURER SHALL NOT WITHDRAW ITS DEFENSE OF AN INSURED
CONSTRUCTION PROFESSIONAL OR COMMENCE AN ACTION SEEKING
REIMBURSEMENT FROM AN INSURED FOR EXPENDED DEFENSE COST UNLESS
AUTHORIZED BY LAW AND UNLESS THE INSURER HAS RESERVED SUCH RIGHT
IN WRITING WHEN ACCEPTING OR ASSUMING THE DEFENSE OBLIGATION.
SECTION 2. Part 1 of article 4 of title 10, Colorado Revised
Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:
10-4-110.4. Exclusion – claims involving loss in progress not
known to insured. (1) A PROVISION IN A LIABILITY INSURANCE POLICY
ISSUED TO A CONSTRUCTION PROFESSIONAL EXCLUDING OR LIMITING
COVERAGE FOR ONE OR MORE CLAIMS ARISING FROM BODILY INJURY,
PROPERTY DAMAGE, ADVERTISING INJURY, OR PERSONAL INJURY THAT
OCCURS BEFORE THE POLICY’S INCEPTION DATE AND THAT CONTINUES,
WORSENS, OR PROGRESSES WHEN THE POLICY IS IN EFFECT IS VOID AND
UNENFORCEABLE IF THE EXCLUSION OR LIMITATION APPLIES TO AN INJURY
OR DAMAGE THAT WAS UNKNOWN TO THE INSURED AT THE POLICY’S
INCEPTION DATE.
(2) ANY PROVISION IN AN INSURANCE POLICY ISSUED IN VIOLATION
OF THIS SECTION IS VOID AND UNENFORCEABLE AS AGAINST PUBLIC POLICY.
PAGE 5-HOUSE BILL 10-1394
A COURT SHALL CONSTRUE AN INSURANCE POLICY CONTAINING A PROVISION
THAT IS UNENFORCEABLE UNDER THIS SECTION AS IF THE PROVISION WAS
NOT A PART OF THE POLICY WHEN THE POLICY WAS ISSUED.
(3) THIS SECTION APPLIES ONLY TO AN INSURANCE POLICY THAT
COVERS OCCURRENCES OF DAMAGE OR INJURY DURING THE POLICY PERIOD
AND THAT INSURES A CONSTRUCTION PROFESSIONAL FOR LIABILITY ARISING
FROM CONSTRUCTION-RELATED WORK.
SECTION 3. Applicability. This act applies to all insurance
policies currently in existence or issued on or after the effective date of this
act.
SECTION 4. Safety clause. The general assembly hereby finds,
PAGE 6-HOUSE BILL 10-1394
determines, and declares that this act is necessary for the immediate
preservation of the public peace, health, and safety.
____________________________ ____________________________
Terrance D. Carroll Brandon C. Shaffer
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Marilyn Eddins Karen Goldman
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
_________________________________________
Bill Ritter, Jr.
GOVERNOR OF THE STATE OF COLORADO
PAGE 7-HOUSE BILL 10-1394
Health Care Reform Update and how Assurant Health’s future is directly tied to your future as we move forward to ensure your and our continued success (as of July 18, 2010)
Assurant Supplementary Critical Illness and Accident Plans – learn how these individual and group list bill plans protect your high deductible clients far beyond ordinary medical expenses.
HR 3590 (M.L.R.’s) Minimum Loss RatioRequirements. On January 1, 2011 Health Care Reform will require insurance carriers to change the methods on how they calculate and manage claims and expenses.
NEW- (as of July 18, 2010) Assurant Supplementary Critical Illness and Accident Plans – learn how these individual and group list bill plans protect your high deductible clients far beyond ordinary medical expenses.
Golden Rule announced the following changes to the health care coverage.
Beginning with applications received on September 1, 2010, Golden Rule will make the following changes regarding coverage effective dates:
• Coverage effective dates for Golden Rule renewable health plans will be the later of 30 days after an application is received or the date requested by the customer (but no greater than 60 days).
• Also, the 14-day waiting period for illness following the effective date of coverage will be eliminated. There will no longer be separate effective dates for injury and illness! Now your clients can receive full benefits for injury or illness immediately starting on their effective date.
This change does not impact current Golden Rule customers whose health plans are already in force or applications received prior to September 1st; nor does it have any impact on effective dates for Golden Rule Short Term or Dental plans.
We thank you for your continued business, and we look forward to working with you to meet the changes and opportunities of our new industry environment.
Thank you,
Golden Rule Insurance Company
We will continue to keep you informed with any changes in the insurance industry.
Commercial property/casualty insurance rates dropped an average of 6.4% during the second quarter this year, according to the Council of Insurance Agents & Brokers’ “Commercial P/C Market Index Survey” released Monday.
Large accounts, which the survey defines as generating more than $100,000 annually in fees and commissions, experienced the steepest decline at 8.9%, while small accounts generating less than $25,000 in fees and commissions registered an average 3.4% decline. Midsize accounts averaged a 7% drop.
“It’s the same old story,” Ken Crerar, president of the Washington-based CIAB, said in a statement. “Carriers continue to fight aggressively for new business as capacity flows into the market.”
It is “definitely a buyers’ market,” Mr. Crerar said.
by BusinessInsurance.com ~Jul 21,2010
Technology is emerging that could solve a growing menace on the nation’s highways: texting while driving.
A Georgia company today announces a partnership with an Irving, Texas, firm to provide software to government agencies and businesses that disables the texting, e-mailing and Web-browsing functions of a wireless phone in moving vehicles. Manage Mobility, an Alpharetta-based management and logistics firm, will provide technology developed by WebSafety Inc.
“We are being asked by our customers what to do on this sort of thing, especially since October … when President Obama issued the federal order banning federal employees from texting while operating government-owned vehicles,” says Stacy Chisum, Manage Mobility’s vice president of sales.
Thirty states and the District of Columbia have banned the practice, but the laws are difficult to enforce. The national movement to discourage it — aimed mostly at young drivers — is spreading to corporate employees and the U.S. government.
Several applications disable cellphones when a vehicle is moving, preventing texting or surfing the Web. These apps, including iZup, tXtBlocker, ZoomSafer and CellSafety, use a phone’s GPS to determine when a vehicle is moving, and block the ability to text when the car is going faster than 5 or 10 mph. Some apps have opt-out features for passengers. The apps do not work on the iPhone.
TECH: Firms create apps to keep distracted walkers on path
‘NO PHONE ZONE’: Rallies join texting fight
WebSafety developed CellSafety in response to the concern over teens texting, and the industry-based software grew out of that, CEO Rowland Day says. “We believe that employers are becoming fully aware of the extension of liability” for crashes caused by employees texting while driving, he says.
Ford recently announced that some of its 2011 vehicles will be equipped with a “Do Not Disturb” button to block incoming calls and text messages.
Some road safety advocates are encouraged. “One thing we don’t know is how broadly accepted this technology will be by drivers,” says Russ Rader of the Insurance Institute for Highway Safety.
About 1.56 trillion texts were sent in the USA in 2009, according to CTIA-The Wireless Association.
By Larry Copeland, USA TODAY – ATLANTA
Mountain Insurance Brokers offers several types of insurance sales positions, from full time agent to part time associate. We are recruiting agents for Colorado, Wyoming and New Mexico. Our top agents exceed $100k in annual income working from home! We are an Independent Agency which means you represent all the companies listed, in efforts to find your customers the absolute best insurance value for their money.
We provide all the tools necessary to make you successful.
Atlantic Casualty has brought back a Claims Made policy for most residential and commercial artisans. Some other non-construction classes can still be written on an Occurrence form and when eligible, your submission will be quoted with this form. As with all Claims Made policies, you will have to read carefully and disclose diligently with your client because the claims trigger is very different. If you have any questions about Claims Made policies, please call us.
The Claims Made program has a $2000 minimum premium at the 1/2/2 limit and the usual supplement is required. The usual minimum premiums ($750 at 1/2/2 ) will apply for occurrence form accounts. We have also developed a relationship with Hartford for some artisan contractors such as dry wall, painting, electrical work and other non-structural classes. This is a “submit for approval” market but the turn-around is very quick.
Also, with Hartford , it is direct bill and admitted in Colorado . Your submission will have to be very complete including contact names and phone numbers. Incomplete submissions will only take longer to quote. And lastly, we are working on a contract with a carrier for larger contract risks. More information about this later.
WASHINGTON—President Obama on Friday signed into law a measure that extends the National Flood Insurance Program through Sept. 30.
The House passed the National Flood Insurance Program Act of 2010 on June 23, and the Senate followed suit a week later. The Senate initially had considered a broader tax bill that included extension of the NFIP, but that measure was pulled because it could not draw enough support to overcome a filibuster aimed at other provisions in the bill.
The NFIP lapsed on June 1 and will have to be reauthorized by Sept. 30 to prevent another lapse.
The House and Senate have been unable to reach agreement on a long-term reauthorization of the NFIP because the House favors requiring the program to offer windstorm and flood coverage, while the Senate has preferred restricting the program to flood coverage only. The result of the disagreement has been a series of short-term extensions.
Colorado will receive $90 million in federal money to subsidize health insurance for up to 4,000 people rejected by private insurers because of pre-existing medical conditions, Gov. Bill Ritter announced Tuesday.
The new high-risk pool, a public-private partnership the state is calling GettingUsCovered, will charge the same rate for health coverage that the average, healthy Coloradan pays.
That’s the major distinction between it and Colorado’s existing high-risk pool, CoverColorado, which insures about 12,000 people who have serious illnesses — or even minor medical problems, such as a teen taking acne medication — that prevented them from buying coverage elsewhere.
CoverColorado clients pay about 130 percent of the market rate for insurance. They cannot seamlessly transfer membership to the new program because of a rule that says beneficiaries must have gone without health insurance for at least six months to quality.
The governor and CoverColorado executive director Suzanne Bragg-Gamble emphatically discouraged any CoverColorado clients from dropping out of that program, going without insurance for six months and then signing up for the new insurance plan. The outcome for a seriously ill person to survive without coverage for six months “could be disastrous,” Bragg-Gamble said.
Besides, it’s possible that within the next few months, the new risk pool will be full.
As part of national health reform, the federal government gave states until July 1 to set up insurance pools for those with pre-existing conditions. In states that did not set up a pool, a new federal high-risk pool will take effect.
Colorado has $90 million to spend during the next three years to keep its high-risk pool afloat. The pool is intended to phase out in 2014, when insurance companies can no longer reject people for pre-existing health conditions.
The state pool is a partnership between CoverColorado and Rocky Mountain Health Plans, which will handle claims and billing. The federal money will subsidize the cost of the coverage, which is expected to exceed premium rates charged to patients.
By federal mandate, premiums cannot cost more than what a healthy person of similar age would pay in Colorado. They will range from $115 a month for an 18-year-old nonsmoker in Boulder County to $807 for a 64-year-old smoker in Eagle County. The annual deductible is $2,500, with $30 copays for doctor visits.
Beneficiaries will choose from the Rocky Mountain network of 2,500 doctors and 99 hospitals, said Rocky Mountain Health Plans president Steve ErkenBrack, who called the high-risk pool “a bridge into the post-health care reform world.”
The program eventually might accept more than 4,000 people, depending on how much the initial applicants cost to insure.
“The big question that we have right now is, how much are these people going to cost,” Bragg-Gamble said. “We cannot run out of money.”
State research estimated that of some 700,000 Coloradans without health insurance, about 30,000 would qualify for the new pool. That doesn’t mean they can afford it, however.
Among those who planned to sign up immediately was Karen Lewis, a 50-year-old Denverite who hasn’t had health insurance since her marriage ended two years ago. She has been rejected multiple times because she has diabetes and heart problems.
“It’s been a long haul, a very, very expensive long haul,” she said.
Lewis, who attended the governor’s news conference at the Capitol, recently spent two days in the hospital at a cost of $11,000. She spends $115 to $400 a month on prescription drugs.
“I’ve sometimes cheated a little bit and not taken as much medication as I should,” she said, adding that she would fill out an application “as quick as they put it in my hand.”
To enroll, go to gettinguscovered .org or call 877-779-0387.
CNA Financial, a property and casualty insurance provider, has unveiled the permanent location for its new service center to be set up within its existing Denver branch office in Colorado. The new center is expected to create approximately 300 positions.
CNA added that it will also triple the square footage and quadruple the employee size of the branch, once the center is opened with full functionality in 2011.
Over the next year, the service center will gradually implement a portion of Worldwide Operations (WWO) and claim express capabilities beyond current locations in Maitland, Florida, Chicago, Illinois and Pennsylvania.
The service center will feature claim handling, policy processing, a call center as well as billing and collections to offer CNA producers and customers overall operational effectiveness and improved business continuity.
CNA claimed that WWO has filled more than 30 positions within its customer support center, small business center and middle market policy processing.
