BILL ANALYSIS


                                                        H.B. 2501
                                               By: Averitt (Cain)
                                             Economic Development
                                                         05-18-95
                              Senate Committee Report (Unamended)
BACKGROUND

Section 5B, Article 5.43-2 of the Insurance Code requires a
registered fire alarm firm to carry a general liability insurance
policy that includes products and completed operations.  Such
insurance is required in most states and similar insurance is
required for other businesses in Texas.

Historically, most fire alarm contracts have included a limitation
on liability.  Alarm companies usually do not know the uses of the
property, the value or nature of the contents on the property, or
the people using the alarm.  This prevents fire alarm companies
from being in the position to evaluate the risks involved.

PURPOSE

As proposed, H.B. 2501 provides that Section 5B, Article 5.43-2,
Insurance Code, does not affect the rights of a fire alarm company
to negotiate or contract for limitations of liability with a third
party, including a customer.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 5B, Article 5.43-2, Insurance Code, by
adding Subsection (g), to provide that this section does not affect
the rights of the insured to negotiate or contract for limitations
of liability with a third party, including a customer of the
insured.

SECTION 2. Effective date: September 1, 1995.

SECTION 3. Emergency clause.