Vote Recommendation | Economic Freedom | Property Rights | Personal Responsibility | Limited Government | Individual Liberty |
---|---|---|---|---|---|
Yes | Neutral | Positive | Neutral | Neutral | Positive |
Relating to the disclosure
of certain information under a consolidated insurance program.
No significant fiscal implication to the State is anticipated.
SB 1081 would make changes to Chapter 151 (Consolidated
Insurance Programs) of the Insurance Code. The Principal, otherwise known as
the person who procures the insurance policy under a consolidated insurance
program (CIP), must provide key information regarding CIP coverage to a person
who is considering entering into it. This information must be disclosed before
that person agrees to a CIP contract.
If the principal has not disclosed CIP information in a
timely manner then it may not require a person to agree to the CIP contractor in
order to work on that project. However,
if a person elects not to participate in the program, it must obtain its own
insurance.
A consolidated insurance program or controlled insurance
program (CIP) is a program in which a single entity (called the principal) procures
an insurance policy for a construction project. The project owner or general contractor
is the principal. This insurance policy usually incorporates general liability
insurance and workers’ compensation insurance for most of the parties working
on a construction project.
The benefits of this type of insurance are that it allows
more coverage options for construction projects and it offers lower insurance
costs since these plans are typically bought in bulk. However, the author’s
statement of intent says that the cost savings provided by a CIP are usually
due to insufficient coverage.
This legislation would require a contractor to provide
certain CIP information so that a person may compare the coverage options with
their own insurance. Additionally each contractor covered by a CIP would be
required to receive a copy of the policy.
It is important to note that this bill would still allow a
general contractor to accept only those contractors that agree to sign on to
the CIP before working on a construction project. This does not apply if the
general contractor has failed to provide a contractor CIP information before agreeing
to a contract. In that situation, the general contractor may not prohibit a contractor
from working on the project regardless of whether the contractor agrees to the
CIP. However, if that contractor does
not agree to CIP then it would be required to obtain its own insurance before
working on the project.
We support SB 1081 because it protects the individual
liberty and property rights of a person by requiring him or her to receive notification that the project he or she is planning to work on requires agreeing to a CIP. Additionally, we support this bill because it requires the full terms of the CIP to be presented before and agreement is made. Likewise, this bill does
not infringe on a general contractor’s right to prohibit persons from working
on a project that do not agree to the terms of the CIP.