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A BILL TO BE ENTITLED
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AN ACT
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relating to enforcement of certain insurance provisions in |
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construction contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter E, Chapter 21, Insurance Code, is |
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amended by adding Article 21.75 to read as follows: |
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Art. 21.75. INSURANCE AND RISK TRANSFER AGREEMENTS IN |
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CERTAIN CONSTRUCTION CONTRACTS |
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Sec. 1. DEFINITIONS. In this article: |
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(1) "Additional insured" means a person covered under |
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another person's insurance policy for an occurrence caused by |
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something other than the sole negligence of the named insured under |
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the policy, or an indemnitor under an indemnification agreement. |
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(2) "Construction contract" means a contract or |
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agreement made or entered into by an owner, contractor, |
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subcontractor, or supplier concerning the construction, |
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alteration, remodeling, repair, or maintenance of a building, |
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structure, appurtenance, or other improvement to or on real |
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property, including moving, demolition, and excavation connected |
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with the real property. |
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(3) "Construction insurance provision" means a |
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covenant, promise, agreement, or understanding contained in a |
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construction contract, or in an agreement collateral to or |
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affecting a construction contract, that: |
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(A) requires a person to provide insurance |
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coverage; |
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(B) provides insurance coverage; or |
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(C) requires insurance coverage for an |
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indemnitee under an indemnification agreement. |
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Sec. 2. CERTAIN INSURANCE PROVISIONS UNENFORCEABLE. (a) A |
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construction insurance provision is void and unenforceable to the |
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extent that the provision requires that: |
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(1) a person, including an indemnitee under an |
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indemnification agreement, be an additional insured; or |
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(2) the insurance policy be endorsed to provide a |
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waiver of subrogation. |
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(b) An insurance policy provision or endorsement that |
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provides for an additional insured or a waiver of subrogation in |
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contravention of this article is void. |
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Sec. 3. WAIVER PROHIBITED. The provisions of this article |
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may not be waived by contract or otherwise. |
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Sec. 4. APPLICABILITY OF OTHER LAW. This article prevails |
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over any other law that conflicts with or is inconsistent with this |
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article. |
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SECTION 2. The changes in law made by this Act apply only to |
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a contract or agreement entered into on or after the effective date |
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of this Act. A contract or agreement entered into before the |
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effective date of this Act is governed by the applicable law in |
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effect immediately before the effective date of this Act, and that |
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law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2011. |