Construction Professional Insurance Coverage Transparency
The findings of the study will serve as a foundation for enhancing transparency in the insurance landscape for construction professionals. By requiring sellers of new residential properties to disclose pertinent insurance information, including policy limits, periods, and exclusions, the bill aims to equip potential homeowners with the essential knowledge needed to understand the liability coverage associated with their purchase. This disclosure is particularly crucial for mitigating risks associated with construction defects that can arise post-purchase.
House Bill 1083 mandates the Colorado Division of Insurance to conduct a comprehensive study on construction liability insurance for construction professionals. The primary objective of the study is to gather detailed information regarding all insurers offering construction liability policies, their rates, classification systems, and the coverage terms they provide. The study will also include a comparative analysis of insurance rates with regional averages and aim to identify common limitations or exclusions found in these policies, particularly as they relate to residential projects.
While supporters laud the bill for bolstering transparency and accountability within the real estate market, concerns have been raised regarding the administrative burden it may impose on sellers. Critics argue that the requirement to disclose detailed insurance information could complicate the home-selling process and deter new residential developments. Moreover, the enforcement mechanisms outlined in the bill, including civil suits for non-compliance, introduce further considerations regarding the potential for increased litigation in situations where ambiguities or misunderstandings arise around insurance disclosures.