Requests a study relative to contractors' insurance policies and whether such policies should insure claims against contractors' workmanship
If implemented, the study could lead to changes in how contractors handle general liability insurance, especially concerning claims related to their workmanship. Currently, it is noted that typical Commercial General Liability (CGL) policies often exclude such coverage, denying claims when construction fails due to contractors’ faults. The findings could prompt modifications in existing regulations or insurance standards, affecting both contractors and consumers within the state.
House Study Request 5 (HSR5) calls for an evaluation into the general liability policies held by contractors and subcontractors in Louisiana. Specifically, the House of Representatives is tasked with assessing whether these policies should cover claims related to defective workmanship by licensed contractors. The study aims to ensure better protection for the general public against the risks associated with substandard workmanship that may arise during construction projects. It would provide recommendations prior to the 2017 Regular Session of the Louisiana Legislature.
The general sentiment surrounding HSR5 appears to be focused on consumer protection. Proponents of the study emphasize the importance of safeguarding homeowners and businesses from the financial consequences of defective construction work. However, there may be contention regarding how increased insurance coverage could affect premium costs and liability for contractors, leading to a cautious approach from sectors concerned about potential increases in operational costs.
Notable points of contention that may arise from the study include the balancing act between ensuring consumer protection through insurance coverage and the implications for contractors who may face higher liability costs. The existing legal precedent indicates that CGL policies typically do not cover issues arising from one’s own workmanship, which raises discussions about potential reforms in the construction industry's insurance landscape in Louisiana.