As expected when the bill was repassed by the state House of Representatives and Senate, HB-1394 has now been signed by Governor Ritter and is law. The law applies to all insurance policies currently in existence or issued on or after May 21, 2010. To view or print the new law, click here or visit the PIIAC website at www.piiac.com. Once there, hover your cursor over the “Advocacy” header and then click on “Insurance Legislation.”

PIIAC thanks its members statewide for their grassroots efforts in getting messages of concern about possible effects of HB-1394 to lawmakers and the governor’s office. Because of those efforts, the industry opposition to the bill succeeded in having the governor recommend amendments that were eventually approved by both the Senate and House.

Your efforts made a difference to the final outcome for HB-1394 which is what organized grassroots activity and legislative interest in your industry and small business is really all about. We cannot thank you enough for the time and energy you expended in helping PIIAC fight, and ultimately amend, HB-1394. We truly appreciate your efforts and hope you will remain active with PIIAC in the legislative process as we continue to work to protect the business climate for independent insurance agents and small business as a whole in Colorado. In order for PIIAC to be well informed about the legislative contacts our members have, we ask that you please complete the attached form and either e-mail it to bfidler@piiac.com or fax it back to 303-512-0575 at your earliest convenience. The information garnered from the PIIAC Grassroots Network form will help us, as an association, identify members we can reach out to for support and assistance as future legislative issues come up.

One of the most notable outcomes of your efforts toward HB-1394 was amended language that helped to clear up concerns for covering “workmanship.” It’s important for PIIAC members to note the law language prohibits use of “super Montrose” exclusions with any commercial general liability insurance policy issued to a construction professional. Our feedback indicates a fairly large number of policies containing those exclusions exist today.

Now, understandably, some PIIAC members wonder where we go from here. While PIIAC received information that some insurers writing construction GL have withdrawn in whole or in part from the Colorado marketplace, others indicate they are here to stay with some changes. Still others have declared they are studying the possible impact of HB-1394 while cautiously approaching existing and new business.

In recent weeks, since the introduction of HB-1394 on April 1, PIIAC members have remained in close contact with insurers to learn construction GL availability. PIIAC suggests members may want to continue that contact as a proactive method to better help and prepare their insureds for some expected changes to their policies and possible changes in cost.

PIIAC believes GL insurance for construction professionals in Colorado is a very unsettled area, particularly now. We anticipate members will see increased activity in the marketplace in the coming weeks and months. PIIAC cautions members to pay attention to what’s going on, be very thoughtful about what they are presenting to their insureds as we are hearing possible scenarios for challenges to HB-1394 language and to be smart about the potential for E&O exposures associated with construction professional GL.

There is no legal case study for what might occur in this market and we regret our not so trustworthy crystal ball is on the blink. But, we do want to remind members of one thing. At the very least we believe agents are obligated to be knowledgeable about what they are writing to ensure, to the best of their ability, the forms they are providing are legally compliant with Colorado law.

Stay tuned. PIIAC will bring you more information on HB-1394 in the near future, including a summary of how HB-1394 became a law.

This Legislative Update is sent to you by the Professional Independent Insurance Agents of Colorado (PIIAC) in an effort to keep the Colorado insurance industry informed and engaged in legislative activities affecting the industry, small business and consumers.