In a new set of talking points being circulated around the Colorado Capitol, the American Subcontractors Association of Colorado has recently come out against HB 10-1394. The circulation from the ASA states:
American Subcontractors Association of Colorado Opposes HB10-1394Sponsored by Rep. Joe Rice and Sen. Mark Scheffel“Concerning Commercial Liability Insurance PoliciesIssued to Construction Professionals”
What the bill does: The bill attempts to correct re’cent court decisions involving construction defect cases in Colorado. The bill dismantles the insurance industry’s comprehensive general liability policy, (CGL) designed and approved by the National Association of Insurance Commissioners (NAIC) and other insurance professional associations. The bill denies insurance companies the tools they need to protect insureds (subcontractors) from fraudulent and unsubstantiated construction defect claims.
If passed, you will see an exodus of insurance companies leaving the state, which in turn will drive premium costs through the roof. Many construction companies will be unable to obtain insurance and will be available only at a price far beyond the reach of most small and medium sized subcontractor businesses. This bill encourages poor workmanship and lower safety standards by requiring insurance companies’ to cover improperly performed work.
Why the bill is UNNECESSARY: The existing comprehensive general liability policy (CGL) is the standard in the construction industry. It has properly covered all policy holders for claims that have arisen for damage to other parties from work of the insured. Nothing has occurred in any Colorado Court findings that justifies altering the fundamental principles on which these policies have been written. No other state has seen any need or made any attempt to enact such sweeping change.
What you can do! Vote no on HB10-1394. The passage of this bill threatens an industry that is already experiencing 25% unemployment and limited work opportunities. Increasing the cost of insurance and reducing the amount of companies that will do business is contrary to good business practices. You want a viable construction industry, not one that is incapable of working under the public policy created by HB10-1394. Vote no on HB10-1394.
In other news, I have heard through the grapevine that other carriers, including American Safety, AIX, Century, and Hudson are also making noises about leaving the Colorado market should HB 10-1394 become law. The bill will be heard tomorrow in the Senate Business, Labor & Technology Committee tomorrow at 1:30 in Senate Committee Room 354.
For additional information regarding Colorado construction litigation, please contact David M. McLain at (303) 987-9813 or by e-mail at mclain@hhmrlaw.com.
