Colorado 2024 Regular Session

Colorado House Bill HB1083 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	Second Regular Session
2	2	Seventy-fourth General Assembly
3	3	STATE OF COLORADO
4	4	INTRODUCED
5	5
6	6
7	7	LLS NO. 24-0192.01 Josh Schultz x5486
8	8	HOUSE BILL 24-1083
9	9	House Committees Senate Committees
10	10	Business Affairs & Labor
11	11	A BILL FOR AN ACT
12	12	C
13	13	ONCERNING INSURANCE COVERAGE FOR CONSTRUCTION101
14	14	PROFESSIONALS.102
15	15	Bill Summary
16	16	(Note: This summary applies to this bill as introduced and does
17	17	not reflect any amendments that may be subsequently adopted. If this bill
18	18	passes third reading in the house of introduction, a bill summary that
19	19	applies to the reengrossed version of this bill will be available at
20	20	http://leg.colorado.gov
21	21	.)
22	22	The bill requires the division of insurance (division) to conduct or
23	23	cause to be conducted a study of construction liability insurance for
24	24	construction professionals in Colorado. The study must identify the
25	25	following:
26	26	! All insurers offering construction liability policies in
27	27	Colorado (policies);
28	28	HOUSE SPONSORSHIP
29	29	Willford and Brown,
30	30	SENATE SPONSORSHIP
31	31	Cutter,
32	32	Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
33	33	Capital letters or bold & italic numbers indicate new material to be added to existing law.
34	34	Dashes through the words or numbers indicate deletions from existing law. ! The rates charged by insurers for policies and the basis for
35	35	the rates, including data for the past 5 years, if available;
36	36	! Risk factors, classifications, and coverage descriptions
37	37	insurers use to set policy rates;
38	38	! A comparison of the policy rates insurers charge with rates
39	39	charged by other states in the region to cover similar
40	40	residential projects;
41	41	! Policy coverage terms; and
42	42	! Common limitations or exclusions from policy coverage.
43	43	The bill requires that, at least 14 days prior to closing the sale of
44	44	a new residence, the seller of the residence provide the purchaser and the
45	45	county clerk and recorder's office for the county where the new residence
46	46	is located with information regarding the insurance coverage for the
47	47	property subject to the sale, including:
48	48	! Identification of each policy and the coverage provider that
49	49	may provide coverage for a construction professional's
50	50	work on the residence;
51	51	! The amount of the policy limits for each policy identified;
52	52	! The policy period for each policy identified, including
53	53	whether the policy provides coverage on a claims-made
54	54	basis or occurrence basis; and
55	55	! Identification of relevant exclusions from coverage.
56	56	Be it enacted by the General Assembly of the State of Colorado:1
57	57	SECTION 1. In Colorado Revised Statutes, add 10-4-122 as2
58	58	follows:3
59	59	10-4-122. Construction liability insurance study - report -4
60	60	definitions - repeal. (1) A
61	61	S USED IN THIS SECTION, UNLESS THE CONTEXT5
62	62	OTHERWISE REQUIRES:6
63	63	(a) "C
64	64	ONSTRUCTION LIABILITY POLICY" HAS THE MEANING SET7
65	65	FORTH IN SECTION 6-29-101 (1).8
66	66	(b) "R
67	67	ATES" MEANS THE AMOUNT AN INSURER CHARGES FOR AN9
68	68	INSURANCE POLICY, INCLUDING PREMIUMS OR OTHER AMOUNTS CHARGED10
69	69	FOR COVERAGE.11
70	70	(c) "R
71	71	ESIDENTIAL PROJECT" HAS THE MEANING SET FORTH IN12
72	72	SECTION 6-29-101 (4).13
73	73	HB24-1083-2- (d) "STUDY" MEANS THE CONSTRUCTION LIABILITY POLICIES1
74	74	STUDY DESCRIBED IN SUBSECTION (2) OF THIS SECTION.2
75	75	(2) T
76	76	HE COMMISSIONER SHALL CONDUCT OR CAUSE TO BE3
77	77	CONDUCTED A STUDY OF CONSTRUCTION LIABILITY POLICIES IN4
78	78	C
79	79	OLORADO.5
80	80	(3) T
81	81	HE STUDY MUST IDENTIFY, AT A MINIMUM:6
82	82	(a) A
83	83	LL INSURERS OFFERING CONSTRUCTION LIABILITY POLICIES IN7
84	84	THE STATE, INCLUDING TO RESIDENTIAL PROPERTY DEVELOPERS ;8
85	85	(b) T
86	86	HE RATES CHARGED BY INSURERS , AND THE BASIS FOR THE9
87	87	RATES, FOR CONSTRUCTION LIABILITY POLICIES IN THE STATE, INCLUDING10
88	88	DATA FOR THE PAST FIVE YEARS, IF AVAILABLE;11
89	89	(c) R
90	90	ISK FACTORS, CLASSIFICATIONS, AND COVERAGE12
91	91	DESCRIPTIONS THAT INSURERS USE TO SET RATES FOR CONSTRUCTION13
92	92	LIABILITY POLICIES IN THE STATE;14
93	93	(d) A
94	94	COMPARISON OF THE RATES DESCRIBED IN SUBSECTION (3)(b)15
95	95	OF THIS SECTION WITH THE RATES CHARGED BY OTHER STATES IN THE16
96	96	REGION FOR SIMILAR RESIDENTIAL PROJECTS ;17
97	97	(e) T
98	98	HE TERMS OF COVERAGE IN EACH INSURER 'S CONSTRUCTION18
99	99	LIABILITY POLICIES IN THE STATE;19
100	100	(f) L
101	101	IMITATIONS OR EXCLUSIONS FROM COVERAGE IN EACH20
102	102	INSURER'S CONSTRUCTION LIABILITY POLICIES IN THE STATE, INCLUDING:21
103	103	(I) M
104	104	ULTIFAMILY PROJECTS;22
105	105	(II) P
106	106	ROJECTS DESCRIBED IN THE "COLORADO COMMON INTEREST23
107	107	O
108	108	WNERSHIP ACT", ARTICLE 33.3 OF TITLE 38; AND24
109	109	(III) P
110	110	ROJECTS COVERED UNDER AN OWNER -CONTROLLED25
111	111	INSURANCE PROGRAM; AND26
112	112	(g) T
113	113	HE APPROPRIATE POLICY LIMITS FOR A RESIDENTIAL PROJECT27
114	114	HB24-1083
115	115	-3- WITH REGARD TO THE SIZE AND COST OF CONSTRUCTION .1
116	116	(4) T
117	117	HE COMMISSIONER MAY CONTRACT WITH A THIRD PARTY TO2
118	118	CONDUCT PART OR ALL OF THE STUDY .3
119	119	(5) T
120	120	HE COMMISSIONER SHALL:4
121	121	(a) O
122	122	N OR BEFORE DECEMBER 31, 2026, SUBMIT A REPORT5
123	123	SUMMARIZING THE STUDY, INCLUDING THE COMMISSIONER'S FINDINGS AND6
124	124	RECOMMENDATIONS ON THE ISSUES IDENTIFIED IN SUBSECTION (3) OF THIS7
125	125	SECTION AND OTHER INFORMATION THAT THE COMMISSIONER DEEMS8
126	126	APPROPRIATE, TO THE HOUSE OF REPRESENTATIVES HEALTH AND9
127	127	INSURANCE COMMITTEE ; THE HOUSE OF REPRESENTATIVES10
128	128	TRANSPORTATION, HOUSING, AND LOCAL GOVERNMENT COMMITTEE ; THE11
129	129	SENATE BUSINESS, LABOR, AND TECHNOLOGY COMMITTEE ; AND THE12
130	130	SENATE LOCAL GOVERNMENT AND HOUSING COMMITTEE ; OR THEIR13
131	131	SUCCESSOR COMMITTEES; AND14
132	132	(b) P
133	133	OST THE REPORT, WHICH MUST BE MADE AVAILABLE AS A15
134	134	PUBLIC RECORD ON A PUBLIC-FACING PORTION OF THE DIVISION'S WEBSITE.16
135	135	(6) T
136	136	HE COMMISSIONER MAY USE THE INFORMATION GATHERING17
137	137	AUTHORITY GRANTED TO THE COMMISSIONER IN SECTION 10-1-108 IN18
138	138	FURTHERANCE OF THE STUDY .19
139	139	(7) T
140	140	HIS SECTION IS REPEALED, EFFECTIVE SEPTEMBER 1, 2027.20
141	141	SECTION 2. In Colorado Revised Statutes, add article 29 to title21
142	142	6 as follows:22
143	143	ARTICLE 2923
144	144	Builder and Developer Disclosures24
145	145	of Insurance Coverage25
146	146	6-29-101. Definitions. A
147	147	S USED IN THIS ARTICLE 29, UNLESS THE26
148	148	CONTEXT OTHERWISE REQUIRES :27
149	149	HB24-1083
150	150	-4- (1) "CONSTRUCTION LIABILITY POLICY" MEANS AN INSURANCE1
151	151	POLICY, INCLUDING A COMMERCIAL GENERAL LIABILITY POLICY , AN2
152	152	ERRORS AND OMISSIONS POLICY, A DIRECTORS AND OFFICERS POLICY, A3
153	153	CONTRACTOR -CONTROLLED INSURANCE PROGRAM , AN4
154	154	OWNER-CONTROLLED INSURANCE PROGRAM , OR ANY OTHER INSURANCE5
155	155	POLICY, WHETHER UNDERLYING, EXCESS, OR UMBRELLA, THAT MAY COVER6
156	156	OCCURRENCES OF DAMAGE OR INJURY DURING THE POLICY PERIOD AND7
157	157	THAT MAY INSURE A CONSTRUCTION PROFESSIONAL FOR LIABILITY ARISING8
158	158	FROM CONSTRUCTION-RELATED WORK, INCLUDING:9
159	159	(a) W
160	160	HEN A CONSTRUCTION PROFESSIONAL MAY BE ENTITLED TO10
161	161	A DEFENSE OR INDEMNITY AS AN ADDITIONAL INSURED UNDER ANOTHER11
162	162	CONSTRUCTION PROFESSIONAL 'S LIABILITY INSURANCE POLICY; OR12
163	163	(b) W
164	164	HEN A CONSTRUCTION PROFESSIONAL MAY BE ENTITLED TO13
165	165	A DEFENSE OR INDEMNITY AS AN ENROLLED CONSTRUCTION PROFESSIONAL14
166	166	UNDER AN OWNER -CONTROLLED INSURANCE PROGRAM OR A15
167	167	CONTRACTOR-CONTROLLED INSURANCE PROGRAM .16
168	168	(2) "C
169	169	ONSTRUCTION PROFESSIONAL " MEANS AN ARCHITECT ,17
170	170	CONTRACTOR, SUBCONTRACTOR, DEVELOPER, BUILDER, BUILDER VENDOR,18
171	171	ENGINEER, OR INSPECTOR PERFORMING OR FURNISHING THE DESIGN ,19
172	172	SUPERVISION, INSPECTION, CONSTRUCTION, OR OBSERVATION OF THE20
173	173	CONSTRUCTION OF AN IMPROVEMENT TO REAL PROPERTY .21
174	174	(3) "N
175	175	EW RESIDENCE" MEANS A STRUCTURE OR UNIT IN A22
176	176	RESIDENTIAL PROJECT.23
177	177	(4) "R
178	178	ESIDENTIAL PROJECT" MEANS A DEVELOPMENT CONTAINING24
179	179	TWO OR MORE FOR -SALE RESIDENCES FOR SEPARATE OWNERSHIP ,25
180	180	INCLUDING STRUCTURES DESIGNED FOR NONRESIDENTIAL USES WITHIN THE26
181	181	PROJECT.27
182	182	HB24-1083
183	183	-5- 6-29-102. Disclosures of insurance coverage to purchaser -1
184	184	enforcement. (1) A
185	185	T LEAST FOURTEEN DAYS PRIOR TO CLOSING THE SALE2
186	186	OF A NEW RESIDENCE, THE SELLER SHALL PROVIDE THE PURCHASER WITH3
187	187	INFORMATION REGARDING THE INSUR ANCE COVERAGE FOR THE PROPERTY4
188	188	SUBJECT TO THE SALE, INCLUDING:5
189	189	(a) I
190	190	DENTIFICATION OF EACH CONSTRUCTION LIABILITY POLICY6
191	191	AND THE COVERAGE PROVIDER THAT PROVIDES COVERAGE FOR A7
192	192	CONSTRUCTION PROFESSIONAL 'S WORK ON THE RESIDENCE;8
193	193	(b) T
194	194	HE AMOUNT OF THE POLICY LIMITS FOR EACH POLICY9
195	195	IDENTIFIED;10
196	196	(c) T
197	197	HE POLICY PERIOD FOR EACH POLICY, INCLUDING WHETHER11
198	198	THE POLICY PROVIDES COVERAGE ON A CLAIMS -MADE BASIS OR12
199	199	OCCURRENCE BASIS; AND13
200	200	(d) I
201	201	DENTIFICATION OF RELEVANT EXCLUSIONS FROM COVERAGE ,14
202	202	INCLUDING AN EXCLUSION CONTAINED IN AN ENDORSEMENT AND AN15
203	203	EXCLUSION THAT MAY IMPACT COVERAGE FOR THE RESIDENTIAL PROJECT16
204	204	BASED UPON THE TYPE OF CONSTRUCTION OR POTENTIAL LOSS .17
205	205	(2) T
206	206	HE PURCHASER OF A NEW RESIDENCE MAY FILE A CIVIL SUIT18
207	207	AGAINST THE SELLER IN A COURT OF COMPETENT JURISDICTION ALLEGING19
208	208	THE SELLER'S FAILURE TO COMPLY WITH SUBSECTION (1) OF THIS SECTION.20
209	209	I
210	210	F THE PURCHASER PREVAILS ON THE MATTER , THE COURT SHALL COMPEL21
211	211	THE DISCLOSURE OF THE INFORMATION IDENTIFIED IN SUBSECTION (1) OF22
212	212	THIS SECTION FOR THE NEW RESIDENCE AND MAY REQUIRE THE SELLER TO23
213	213	PAY THE PURCHASER A FINE IN AN AMOUNT UP TO FIVE HUNDRED DOLLARS .24
214	214	I
215	215	F THE SELLER DID NOT PROCURE FOR THE NEW RESIDENCE AN INSURANCE25
216	216	POLICY PROVIDING COVERAGE FOR PROPERTY DAMAGE RESULTING FROM26
217	217	CONSTRUCTION DEFECTS , THE COURT SHALL AWARD REASONABLE27
218	218	HB24-1083
219	219	-6- ATTORNEY FEES AND COSTS, MULTIPLIED BY THREE, TO THE PURCHASER.1
220	220	(3) T
221	221	HIS SECTION DOES NOT APPLY TO AN INDIVIDUAL WHO2
222	222	CONSTRUCTS A RESIDENTIAL STRUCTURE IN WHICH THE INDIVIDUAL WILL3
223	223	RESIDE.4
224	224	6-29-103. Disclosures of insurance coverage to county. (1) A
225	225	T5
226	226	LEAST FOURTEEN DAYS PRIOR TO CLOSING THE SALE OF ANY NEW6
227	227	RESIDENCE, THE SELLER OF THE NEW RESIDENCE SHALL FILE IN THE7
228	228	COUNTY CLERK AND RECORDER 'S OFFICE FOR THE COUNTY IN WHICH THE8
229	229	PROPERTY IS LOCATED INFORMATION REGARDING THE INSURANCE9
230	230	COVERAGE FOR THE PROPERTY SUBJECT TO THE SALE , INCLUDING:10
231	231	(a) T
232	232	HE IDENTITY OF THE ISSUER OF EACH CONSTRUCTION11
233	233	LIABILITY POLICY;12
234	234	(b) T
235	235	HE TYPE AND LIMITS OF INSURANCE COVERAGE ;13
236	236	(c) T
237	237	HE POLICY PERIOD FOR EACH POLICY, INCLUDING WHETHER14
238	238	THE POLICY PROVIDES COVERAGE ON A CLAIMS -MADE BASIS OR15
239	239	OCCURRENCE BASIS; AND16
240	240	(d) I
241	241	DENTIFICATION OF RELEVANT EXCLUSIONS FROM COVERAGE ,17
242	242	INCLUDING AN EXCLUSION CONTAINED IN AN ENDORSEMENT AND AN18
243	243	EXCLUSION THAT MAY IMPACT COVERAGE FOR THE RESIDENTIAL PROJECT19
244	244	BASED UPON THE TYPE OF CONSTRUCTION OR POTENTIAL LOSS .20
245	245	(2) T
246	246	HE COUNTY CLERK AND RECORDER SHALL ENSURE THE21
247	247	INFORMATION REQUIRED BY SUBSECTION (1) OF THIS SECTION IS MADE22
248	248	AVAILABLE FOR PUBLIC INSPECTION.23
249	249	SECTION 3. Act subject to petition - effective date -24
250	250	applicability. (1) This act takes effect at 12:01 a.m. on the day following25
251	251	the expiration of the ninety-day period after final adjournment of the26
252	252	general assembly; except that, if a referendum petition is filed pursuant27
253	253	HB24-1083
254	254	-7- to section 1 (3) of article V of the state constitution against this act or an1
255	255	item, section, or part of this act within such period, then the act, item,2
256	256	section, or part will not take effect unless approved by the people at the3
257	257	general election to be held in November 2024 and, in such case, will take4
258	258	effect on the date of the official declaration of the vote thereon by the5
259	259	governor.6
260	260	(2) This act applies to sales of new residences occurring on or7
261	261	after the applicable effective date of this act.8
262	262	HB24-1083
263	263	-8-