By Brimer                                             H.B. No. 2630

         Line and page numbers may not match official copy.

         Bill not drafted by TLC or Senate E&E.

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to coverage for owners and contractors under certain

 1-3     policies covering subcontractors.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter B, Chapter 5, Insurance Code, is

 1-6     amended by adding Article 5.17 to read as follows:

 1-7           Art. 5.17.  SUBCONTRACTOR'S GENERAL LIABILITY OR WORKERS'

 1-8     COMPENSATION POLICY; CERTAIN COVERAGE PROHIBITED.  (a)  In this

 1-9     article:

1-10                 (1)  "General contractor" means a person who:

1-11                       (A)  under contract with a project owner,

1-12     performs work or arranges for work to be performed; and

1-13                       (B)  is not controlled by the project owner and

1-14     is not subject to the project owner's right of control with respect

1-15     to the performance of the work.

1-16                 (2)  "Owners and contractors protective liability

1-17     insurance" is insurance that provides coverage for the named

1-18     insured's liability arising out of:

1-19                       (A)  operations performed for the named insured

1-20     by an identified general contractor or subcontractor in connection

1-21     with an identified project; or

1-22                       (B)  the named insured's acts or omissions in

 2-1     connection with the named insured's general supervision of the

 2-2     general contractor's or subcontractor's work.

 2-3                 (3)  "Project owner" means a person who, directly or

 2-4     through an agent, contracts with a general contractor.

 2-5                 (4)  "Subcontractor" means a person who furnishes labor

 2-6     to fulfill an obligation to  a general contractor  or to another

 2-7     subcontractor to perform all or part of the work required by the

 2-8     contract between the project owner and the general contractor.

 2-9           (b)  A general liability or workers' compensation insurance

2-10     policy issued to a subcontractor may not, through endorsement or

2-11     otherwise, provide coverage for a project owner or general

2-12     contractor for liability for damages arising from or workers'

2-13     compensation benefits for personal injury, death, or damage to the

2-14     property of others arising from the project that is the subject of

2-15     the contract if liability coverage providing substantially similar

2-16     protection is available to the project owner or general contractor

2-17     through an owners and contractors protective liability insurance

2-18     policy.

2-19           (c)  The commissioner may adopt rules as necessary to

2-20     implement this article.

2-21           SECTION 2.  This Act takes effect September 1, 1997, and

2-22     applies only to an insurance policy that is delivered, issued for

2-23     delivery, or renewed on or after January 1, 1998.  A policy that is

2-24     delivered, issued for delivery, or renewed before January 1, 1998,

2-25     is governed by the law as it existed immediately before the

2-26     effective date of this Act, and that law is continued in effect for

2-27     that purpose.

 3-1           SECTION 3.  The importance of this legislation and the

 3-2     crowded condition of the calendars in both houses create an

 3-3     emergency and an imperative public necessity that the

 3-4     constitutional rule requiring bills to be read on three several

 3-5     days in each house be suspended, and this rule is hereby suspended.