Second Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 24-0192.01 Josh Schultz x5486
HOUSE BILL 24-1083
House Committees Senate Committees
Business Affairs & Labor
A BILL FOR AN ACT
C
ONCERNING INSURANCE COVERAGE FOR CONSTRUCTION101
PROFESSIONALS.102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
The bill requires the division of insurance (division) to conduct or
cause to be conducted a study of construction liability insurance for
construction professionals in Colorado. The study must identify the
following:
! All insurers offering construction liability policies in
Colorado (policies);
HOUSE SPONSORSHIP
Willford and Brown,
SENATE SPONSORSHIP
Cutter,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. ! The rates charged by insurers for policies and the basis for
the rates, including data for the past 5 years, if available;
! Risk factors, classifications, and coverage descriptions
insurers use to set policy rates;
! A comparison of the policy rates insurers charge with rates
charged by other states in the region to cover similar
residential projects;
! Policy coverage terms; and
! Common limitations or exclusions from policy coverage.
The bill requires that, at least 14 days prior to closing the sale of
a new residence, the seller of the residence provide the purchaser and the
county clerk and recorder's office for the county where the new residence
is located with information regarding the insurance coverage for the
property subject to the sale, including:
! Identification of each policy and the coverage provider that
may provide coverage for a construction professional's
work on the residence;
! The amount of the policy limits for each policy identified;
! The policy period for each policy identified, including
whether the policy provides coverage on a claims-made
basis or occurrence basis; and
! Identification of relevant exclusions from coverage.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 10-4-122 as2
follows:3
10-4-122. Construction liability insurance study - report -4
definitions - repeal. (1) A
S USED IN THIS SECTION, UNLESS THE CONTEXT5
OTHERWISE REQUIRES:6
(a) "C
ONSTRUCTION LIABILITY POLICY" HAS THE MEANING SET7
FORTH IN SECTION 6-29-101 (1).8
(b) "R
ATES" MEANS THE AMOUNT AN INSURER CHARGES FOR AN9
INSURANCE POLICY, INCLUDING PREMIUMS OR OTHER AMOUNTS CHARGED10
FOR COVERAGE.11
(c) "R
ESIDENTIAL PROJECT" HAS THE MEANING SET FORTH IN12
SECTION 6-29-101 (4).13
HB24-1083-2- (d) "STUDY" MEANS THE CONSTRUCTION LIABILITY POLICIES1
STUDY DESCRIBED IN SUBSECTION (2) OF THIS SECTION.2
(2) T
HE COMMISSIONER SHALL CONDUCT OR CAUSE TO BE3
CONDUCTED A STUDY OF CONSTRUCTION LIABILITY POLICIES IN4
C
OLORADO.5
(3) T
HE STUDY MUST IDENTIFY, AT A MINIMUM:6
(a) A
LL INSURERS OFFERING CONSTRUCTION LIABILITY POLICIES IN7
THE STATE, INCLUDING TO RESIDENTIAL PROPERTY DEVELOPERS ;8
(b) T
HE RATES CHARGED BY INSURERS , AND THE BASIS FOR THE9
RATES, FOR CONSTRUCTION LIABILITY POLICIES IN THE STATE, INCLUDING10
DATA FOR THE PAST FIVE YEARS, IF AVAILABLE;11
(c) R
ISK FACTORS, CLASSIFICATIONS, AND COVERAGE12
DESCRIPTIONS THAT INSURERS USE TO SET RATES FOR CONSTRUCTION13
LIABILITY POLICIES IN THE STATE;14
(d) A
COMPARISON OF THE RATES DESCRIBED IN SUBSECTION (3)(b)15
OF THIS SECTION WITH THE RATES CHARGED BY OTHER STATES IN THE16
REGION FOR SIMILAR RESIDENTIAL PROJECTS ;17
(e) T
HE TERMS OF COVERAGE IN EACH INSURER 'S CONSTRUCTION18
LIABILITY POLICIES IN THE STATE;19
(f) L
IMITATIONS OR EXCLUSIONS FROM COVERAGE IN EACH20
INSURER'S CONSTRUCTION LIABILITY POLICIES IN THE STATE, INCLUDING:21
(I) M
ULTIFAMILY PROJECTS;22
(II) P
ROJECTS DESCRIBED IN THE "COLORADO COMMON INTEREST23
O
WNERSHIP ACT", ARTICLE 33.3 OF TITLE 38; AND24
(III) P
ROJECTS COVERED UNDER AN OWNER -CONTROLLED25
INSURANCE PROGRAM; AND26
(g) T
HE APPROPRIATE POLICY LIMITS FOR A RESIDENTIAL PROJECT27
HB24-1083
-3- WITH REGARD TO THE SIZE AND COST OF CONSTRUCTION .1
(4) T
HE COMMISSIONER MAY CONTRACT WITH A THIRD PARTY TO2
CONDUCT PART OR ALL OF THE STUDY .3
(5) T
HE COMMISSIONER SHALL:4
(a) O
N OR BEFORE DECEMBER 31, 2026, SUBMIT A REPORT5
SUMMARIZING THE STUDY, INCLUDING THE COMMISSIONER'S FINDINGS AND6
RECOMMENDATIONS ON THE ISSUES IDENTIFIED IN SUBSECTION (3) OF THIS7
SECTION AND OTHER INFORMATION THAT THE COMMISSIONER DEEMS8
APPROPRIATE, TO THE HOUSE OF REPRESENTATIVES HEALTH AND9
INSURANCE COMMITTEE ; THE HOUSE OF REPRESENTATIVES10
TRANSPORTATION, HOUSING, AND LOCAL GOVERNMENT COMMITTEE ; THE11
SENATE BUSINESS, LABOR, AND TECHNOLOGY COMMITTEE ; AND THE12
SENATE LOCAL GOVERNMENT AND HOUSING COMMITTEE ; OR THEIR13
SUCCESSOR COMMITTEES; AND14
(b) P
OST THE REPORT, WHICH MUST BE MADE AVAILABLE AS A15
PUBLIC RECORD ON A PUBLIC-FACING PORTION OF THE DIVISION'S WEBSITE.16
(6) T
HE COMMISSIONER MAY USE THE INFORMATION GATHERING17
AUTHORITY GRANTED TO THE COMMISSIONER IN SECTION 10-1-108 IN18
FURTHERANCE OF THE STUDY .19
(7) T
HIS SECTION IS REPEALED, EFFECTIVE SEPTEMBER 1, 2027.20
SECTION 2. In Colorado Revised Statutes, add article 29 to title21
6 as follows:22
ARTICLE 2923
Builder and Developer Disclosures24
of Insurance Coverage25
6-29-101. Definitions. A
S USED IN THIS ARTICLE 29, UNLESS THE26
CONTEXT OTHERWISE REQUIRES :27
HB24-1083
-4- (1) "CONSTRUCTION LIABILITY POLICY" MEANS AN INSURANCE1
POLICY, INCLUDING A COMMERCIAL GENERAL LIABILITY POLICY , AN2
ERRORS AND OMISSIONS POLICY, A DIRECTORS AND OFFICERS POLICY, A3
CONTRACTOR -CONTROLLED INSURANCE PROGRAM , AN4
OWNER-CONTROLLED INSURANCE PROGRAM , OR ANY OTHER INSURANCE5
POLICY, WHETHER UNDERLYING, EXCESS, OR UMBRELLA, THAT MAY COVER6
OCCURRENCES OF DAMAGE OR INJURY DURING THE POLICY PERIOD AND7
THAT MAY INSURE A CONSTRUCTION PROFESSIONAL FOR LIABILITY ARISING8
FROM CONSTRUCTION-RELATED WORK, INCLUDING:9
(a) W
HEN A CONSTRUCTION PROFESSIONAL MAY BE ENTITLED TO10
A DEFENSE OR INDEMNITY AS AN ADDITIONAL INSURED UNDER ANOTHER11
CONSTRUCTION PROFESSIONAL 'S LIABILITY INSURANCE POLICY; OR12
(b) W
HEN A CONSTRUCTION PROFESSIONAL MAY BE ENTITLED TO13
A DEFENSE OR INDEMNITY AS AN ENROLLED CONSTRUCTION PROFESSIONAL14
UNDER AN OWNER -CONTROLLED INSURANCE PROGRAM OR A15
CONTRACTOR-CONTROLLED INSURANCE PROGRAM .16
(2) "C
ONSTRUCTION PROFESSIONAL " MEANS AN ARCHITECT ,17
CONTRACTOR, SUBCONTRACTOR, DEVELOPER, BUILDER, BUILDER VENDOR,18
ENGINEER, OR INSPECTOR PERFORMING OR FURNISHING THE DESIGN ,19
SUPERVISION, INSPECTION, CONSTRUCTION, OR OBSERVATION OF THE20
CONSTRUCTION OF AN IMPROVEMENT TO REAL PROPERTY .21
(3) "N
EW RESIDENCE" MEANS A STRUCTURE OR UNIT IN A22
RESIDENTIAL PROJECT.23
(4) "R
ESIDENTIAL PROJECT" MEANS A DEVELOPMENT CONTAINING24
TWO OR MORE FOR -SALE RESIDENCES FOR SEPARATE OWNERSHIP ,25
INCLUDING STRUCTURES DESIGNED FOR NONRESIDENTIAL USES WITHIN THE26
PROJECT.27
HB24-1083
-5- 6-29-102. Disclosures of insurance coverage to purchaser -1
enforcement. (1) A
T LEAST FOURTEEN DAYS PRIOR TO CLOSING THE SALE2
OF A NEW RESIDENCE, THE SELLER SHALL PROVIDE THE PURCHASER WITH3
INFORMATION REGARDING THE INSUR ANCE COVERAGE FOR THE PROPERTY4
SUBJECT TO THE SALE, INCLUDING:5
(a) I
DENTIFICATION OF EACH CONSTRUCTION LIABILITY POLICY6
AND THE COVERAGE PROVIDER THAT PROVIDES COVERAGE FOR A7
CONSTRUCTION PROFESSIONAL 'S WORK ON THE RESIDENCE;8
(b) T
HE AMOUNT OF THE POLICY LIMITS FOR EACH POLICY9
IDENTIFIED;10
(c) T
HE POLICY PERIOD FOR EACH POLICY, INCLUDING WHETHER11
THE POLICY PROVIDES COVERAGE ON A CLAIMS -MADE BASIS OR12
OCCURRENCE BASIS; AND13
(d) I
DENTIFICATION OF RELEVANT EXCLUSIONS FROM COVERAGE ,14
INCLUDING AN EXCLUSION CONTAINED IN AN ENDORSEMENT AND AN15
EXCLUSION THAT MAY IMPACT COVERAGE FOR THE RESIDENTIAL PROJECT16
BASED UPON THE TYPE OF CONSTRUCTION OR POTENTIAL LOSS .17
(2) T
HE PURCHASER OF A NEW RESIDENCE MAY FILE A CIVIL SUIT18
AGAINST THE SELLER IN A COURT OF COMPETENT JURISDICTION ALLEGING19
THE SELLER'S FAILURE TO COMPLY WITH SUBSECTION (1) OF THIS SECTION.20
I
F THE PURCHASER PREVAILS ON THE MATTER , THE COURT SHALL COMPEL21
THE DISCLOSURE OF THE INFORMATION IDENTIFIED IN SUBSECTION (1) OF22
THIS SECTION FOR THE NEW RESIDENCE AND MAY REQUIRE THE SELLER TO23
PAY THE PURCHASER A FINE IN AN AMOUNT UP TO FIVE HUNDRED DOLLARS .24
I
F THE SELLER DID NOT PROCURE FOR THE NEW RESIDENCE AN INSURANCE25
POLICY PROVIDING COVERAGE FOR PROPERTY DAMAGE RESULTING FROM26
CONSTRUCTION DEFECTS , THE COURT SHALL AWARD REASONABLE27
HB24-1083
-6- ATTORNEY FEES AND COSTS, MULTIPLIED BY THREE, TO THE PURCHASER.1
(3) T
HIS SECTION DOES NOT APPLY TO AN INDIVIDUAL WHO2
CONSTRUCTS A RESIDENTIAL STRUCTURE IN WHICH THE INDIVIDUAL WILL3
RESIDE.4
6-29-103. Disclosures of insurance coverage to county. (1) A
T5
LEAST FOURTEEN DAYS PRIOR TO CLOSING THE SALE OF ANY NEW6
RESIDENCE, THE SELLER OF THE NEW RESIDENCE SHALL FILE IN THE7
COUNTY CLERK AND RECORDER 'S OFFICE FOR THE COUNTY IN WHICH THE8
PROPERTY IS LOCATED INFORMATION REGARDING THE INSURANCE9
COVERAGE FOR THE PROPERTY SUBJECT TO THE SALE , INCLUDING:10
(a) T
HE IDENTITY OF THE ISSUER OF EACH CONSTRUCTION11
LIABILITY POLICY;12
(b) T
HE TYPE AND LIMITS OF INSURANCE COVERAGE ;13
(c) T
HE POLICY PERIOD FOR EACH POLICY, INCLUDING WHETHER14
THE POLICY PROVIDES COVERAGE ON A CLAIMS -MADE BASIS OR15
OCCURRENCE BASIS; AND16
(d) I
DENTIFICATION OF RELEVANT EXCLUSIONS FROM COVERAGE ,17
INCLUDING AN EXCLUSION CONTAINED IN AN ENDORSEMENT AND AN18
EXCLUSION THAT MAY IMPACT COVERAGE FOR THE RESIDENTIAL PROJECT19
BASED UPON THE TYPE OF CONSTRUCTION OR POTENTIAL LOSS .20
(2) T
HE COUNTY CLERK AND RECORDER SHALL ENSURE THE21
INFORMATION REQUIRED BY SUBSECTION (1) OF THIS SECTION IS MADE22
AVAILABLE FOR PUBLIC INSPECTION.23
SECTION 3. Act subject to petition - effective date -24
applicability. (1) This act takes effect at 12:01 a.m. on the day following25
the expiration of the ninety-day period after final adjournment of the26
general assembly; except that, if a referendum petition is filed pursuant27
HB24-1083
-7- to section 1 (3) of article V of the state constitution against this act or an1
item, section, or part of this act within such period, then the act, item,2
section, or part will not take effect unless approved by the people at the3
general election to be held in November 2024 and, in such case, will take4
effect on the date of the official declaration of the vote thereon by the5
governor.6
(2) This act applies to sales of new residences occurring on or7
after the applicable effective date of this act.8
HB24-1083
-8-