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.