Texas House Bill HB3759

Texas 2009 - 81st Regular

Caption

Relating to the operation and regulation of certain consolidated insurance programs.

Impact

The legislation impacts state insurance laws by establishing clear definitions and requirements for consolidated insurance programs in the context of construction. Key components include stipulations regarding the roles and responsibilities of administrators, principals, and contractors, ensuring that all parties are adequately covered and informed. Furthermore, the bill sets forth minimum coverage limits based on the construction value, thereby providing guidance on the amount of insurance required to mitigate risks for substantial projects. This shift influences how construction projects will manage insurance, potentially affecting project bids and contractors' operational practices.

Summary

House Bill 3759 introduces regulations concerning the operation and oversight of consolidated insurance programs specifically designed for construction projects. The bill aims to streamline the insurance coverage process for contractors working on construction endeavors by allowing a principal to provide general liability and workers' compensation insurance coverage integrated into a single program for multiple construction projects. This unified approach is intended to simplify the coverage requirements and ensure that all contractors involved in a project have access to appropriate insurance protection.

Contention

Although the bill is designed to provide a more comprehensive and manageable approach to insurance in the construction industry, there may be concerns regarding the administrative duties placed on principals and the responsibilities of the insurance administrators. Critics may question whether the parameters set forth ensure adequate protection for all contractors or if they create a disadvantage for smaller contractors who may struggle to meet the collective coverage requirements. Moreover, while proponents emphasize the efficiency and cost-effectiveness of consolidated insurance, opponents might caution that larger insurance policies could consolidate risk and lessen competition among insurers, ultimately impacting premium costs for contractors and the construction industry at large.