79R5542 AJA-F

By:  Eiland                                                       H.B. No. 1217



A BILL TO BE ENTITLED

AN ACT

relating to enforcement of certain insurance provisions in 
construction contracts.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter E, Chapter 21, Insurance Code, is 
amended by adding Article 21.75 to read as follows:
	Art. 21.75.  INSURANCE AND RISK TRANSFER AGREEMENTS IN 
CERTAIN CONSTRUCTION CONTRACTS
	Sec. 1.  DEFINITIONS.  In this article:                                 
		(1)  "Additional insured" means a person covered under 
another person's insurance policy for an occurrence caused by 
something other than the sole negligence of the named insured under 
the policy, or an indemnitor under an indemnification agreement.
		(2)  "Construction contract" means a contract or 
agreement made or entered into by an owner, contractor, 
subcontractor, or supplier concerning the construction, 
alteration, remodeling, repair, or maintenance of a building, 
structure, appurtenance, or other improvement to or on real 
property, including moving, demolition, and excavation connected 
with the real property.
		(3)  "Construction insurance provision" means a 
covenant, promise, agreement, or understanding contained in a 
construction contract, or in an agreement collateral to or 
affecting a construction contract, that:
			(A)  requires a person to provide insurance 
coverage;               
			(B)  provides insurance coverage; or                                  
			(C)  requires insurance coverage for an 
indemnitee under an indemnification agreement.
	Sec. 2.  CERTAIN INSURANCE PROVISIONS UNENFORCEABLE.  (a)  A 
construction insurance provision is void and unenforceable to the 
extent that the provision requires that:
		(1)  a person, including an indemnitee under an 
indemnification agreement, be an additional insured; or
		(2)  the insurance policy be endorsed to provide a 
waiver of subrogation.
	(b)  An insurance policy provision or endorsement that 
provides for an additional insured or a waiver of subrogation in 
contravention of this article is void.
	Sec. 3.  WAIVER PROHIBITED.  The provisions of this article 
may not be waived by contract or otherwise.
	Sec. 4.  APPLICABILITY OF OTHER LAW.  This article prevails 
over any other law that conflicts with or is inconsistent with this 
article.
	SECTION 2.  The changes in law made by this Act apply only to 
a contract or agreement entered into on or after the effective date 
of this Act.  A contract or agreement entered into before the 
effective date of this Act is governed by the applicable law in 
effect immediately before the effective date of this Act, and that 
law is continued in effect for that purpose.
	SECTION 3.  This Act takes effect September 1, 2005.