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  H.B. No. 2093
 
 
 
 
AN ACT
  relating to the operation and regulation of certain consolidated
  insurance programs.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 2, Insurance Code, is amended by adding
  Subtitle C to read as follows:
  SUBTITLE C. PROGRAMS AFFECTING MULTIPLE LINES OF INSURANCE
  CHAPTER 151. CONSOLIDATED INSURANCE PROGRAMS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 151.001.  DEFINITIONS. In this chapter:
               (1)  "Consolidated insurance program" means a program
  under which a principal provides general liability insurance
  coverage, workers' compensation insurance coverage, or both that
  are incorporated into an insurance program for a single
  construction project or multiple construction projects.
               (2)  "Construction project" means construction,
  remodeling, maintenance, or repair of improvements to real
  property.  The term includes the immediate construction location
  and areas incidental and necessary to the work as defined in the
  construction contract documents.  A construction project under this
  chapter does not include a single family house, townhouse, duplex,
  or land development directly related thereto.
               (3)  "Contractor" means any person who has entered into
  a construction contract or a professional services contract and is
  enrolled in the consolidated insurance program.
               (4)  "Claim" includes a loss or liability for a claim,
  damage, expense, or governmentally imposed fine, penalty,
  administrative action, or other action.
               (5)  "Construction contract" means a contract,
  subcontract, or agreement, or a performance bond assuring the
  performance of any of the foregoing, entered into or made by an
  owner, architect, engineer, contractor, construction manager,
  subcontractor, supplier, or material or equipment lessor for the
  design, construction, alteration, renovation, remodeling, repair,
  or maintenance of, or for the furnishing of material or equipment
  for, a building, structure, appurtenance, or other improvement to
  or on public or private real property, including moving,
  demolition, and excavation connected with the real property.  The
  term includes an agreement to which an architect, engineer, or
  contractor and an owner's lender are parties regarding an
  assignment of the construction contract or other modifications
  thereto.
               (6)  "Indemnitor" means a party to a construction
  contract that is required to provide indemnification or additional
  insured status to another party to the construction contract or to a
  third party.
               (7)  "Insurer" has the meaning assigned by Section
  560.001.
               (8)  "Principal" means the person who procures the
  insurance policy under a consolidated insurance program.
         Sec. 151.002.  RULES.  The commissioner shall adopt rules as
  necessary to implement and enforce Subchapter B.
  [Sections 151.003-151.050 reserved for expansion]
  SUBCHAPTER B. GENERAL REQUIREMENTS
         Sec. 151.051.  DURATION OF GENERAL LIABILITY COVERAGE. A
  consolidated insurance program that provides general liability
  insurance coverage must provide completed operations insurance
  coverage for a policy period of not less than three years.
  [Sections 151.052-151.100 reserved for expansion]
  SUBCHAPTER C.  REQUIREMENTS RELATED TO INDEMNIFICATION
         Sec. 151.101.  APPLICABILITY.  (a)  This subchapter applies
  to a construction contract for a construction project for which an
  indemnitor is provided or procures insurance subject to:
               (1)  this chapter; or
               (2)  Title 10.
         (b)  Subsection (a) applies regardless of whether the
  insurance is provided or procured before or after execution of the
  contract.
         Sec. 151.102.  AGREEMENT VOID AND UNENFORCEABLE.  Except as
  provided by Section 151.103, a provision in a construction
  contract, or in an agreement collateral to or affecting a
  construction contract, is void and unenforceable as against public
  policy to the extent that it requires an indemnitor to indemnify,
  hold harmless, or defend a party, including a third party, against a
  claim caused by the negligence or fault, the breach or violation of
  a statute, ordinance, governmental regulation, standard, or rule,
  or the breach of contract of the indemnitee, its agent or employee,
  or any third party under the control or supervision of the
  indemnitee, other than the indemnitor or its agent, employee, or
  subcontractor of any tier.
         Sec. 151.103.  EXCEPTION FOR EMPLOYEE CLAIM.  Section
  151.102 does not apply to a provision in a construction contract
  that requires a person to indemnify, hold harmless, or defend
  another party to the construction contract or a third party against
  a claim for the bodily injury or death of an employee of the
  indemnitor, its agent, or its subcontractor of any tier.
         Sec. 151.104.  UNENFORCEABLE ADDITIONAL INSURANCE
  PROVISION.  (a)  Except as provided by Subsection (b), a provision
  in a construction contract that requires the purchase of additional
  insured coverage, or any coverage endorsement, or provision within
  an insurance policy providing additional insured coverage, is void
  and unenforceable to the extent that it requires or provides
  coverage the scope of which is prohibited under this subchapter for
  an agreement to indemnify, hold harmless, or defend.
         (b)  This section does not apply to a provision in an
  insurance policy, or an endorsement to an insurance policy, issued
  under a consolidated insurance program to the extent that the
  provision or endorsement lists, adds, or deletes named insureds to
  the policy.
         Sec. 151.105.  EXCLUSIONS.  This subchapter does not affect:
               (1)  an insurance policy, including a policy issued
  under an owner-controlled or owner-sponsored consolidated
  insurance program or a contractor-controlled or
  contractor-sponsored consolidated insurance program, except as
  provided by Section 151.104;
               (2)  a cause of action for breach of contract or
  warranty that exists independently of an indemnity obligation,
  including an indemnity obligation in a construction contract under
  a construction project for which insurance is provided under a
  consolidated insurance program;
               (3)  indemnity provisions contained in loan and
  financing documents, other than construction contracts to which the
  contractor and owner's lender are parties as provided under Section
  151.001(5);
               (4)  general agreements of indemnity required by
  sureties as a condition of execution of bonds for construction
  contracts;
               (5)  the benefits and protections under the workers' 
  compensation laws of this state;
               (6)  the benefits or protections under the governmental
  immunity laws of this state;
               (7)  agreements subject to Chapter 127, Civil Practice
  and Remedies Code;
               (8)  a license agreement between a railroad company and
  a person that permits the person to enter the railroad company's
  property as an accommodation to the person for work under a
  construction contract that does not primarily benefit the railroad
  company;
               (9)  an indemnity provision pertaining to a claim based
  upon copyright infringement;
               (10)  an indemnity provision in a construction
  contract, or in an agreement collateral to or affecting a
  construction contract, pertaining to:
                     (A)  a single family house, townhouse, duplex, or
  land development directly related thereto; or
                     (B)  a public works project of a municipality; or
               (11)  a joint defense agreement entered into after a
  claim is made.
  [Sections 151.106-151.150 reserved for expansion]
  SUBCHAPTER D.  NONWAIVER
         Sec. 151.151.  NONWAIVER.  A provision of this chapter may
  not be waived by contract or otherwise.
         SECTION 2.  Section 2252.902, Government Code, is repealed.
         SECTION 3.  (a)  Chapter 151, Insurance Code, as added by
  this Act, applies only to a new or renewed consolidated insurance
  program for a construction project that begins on or after January
  1, 2012. A consolidated insurance program for a construction
  project that begins before January 1, 2012, is governed by the law
  as it existed immediately before the effective date of this Act, and
  that law is continued in effect for that purpose.
         (b)  The changes in law made by this Act apply only to an
  original construction contract with an owner of an improvement or
  contemplated improvement that is entered into on or after the
  effective date of this Act.  If an original construction contract
  with an owner of an improvement or contemplated improvement is
  entered into on or after the effective date of this Act, the changes
  in law made by this Act apply to a related subcontract, purchase
  order contract, personal property lease agreement, and insurance
  policy.  If an original construction contract with an owner of an
  improvement or contemplated improvement is entered into before the
  effective date of this Act, that original construction contract and
  a related subcontract, purchase order contract, personal property
  lease agreement, and insurance policy are governed by the law in
  effect immediately before the effective date of this Act, and that
  law is continued in effect for that purpose.
         SECTION 4.  This Act takes effect January 1, 2012.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2093 was passed by the House on May
  13, 2011, by the following vote:  Yeas 103, Nays 41, 1 present, not
  voting; that the House refused to concur in Senate amendments to
  H.B. No. 2093 on May 26, 2011, and requested the appointment of a
  conference committee to consider the differences between the two
  houses; and that the House adopted the conference committee report
  on H.B. No. 2093 on May 29, 2011, by the following vote:  Yeas 121,
  Nays 21, 4 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 2093 was passed by the Senate, with
  amendments, on May 23, 2011, by the following vote:  Yeas 23, Nays
  8
  ; at the request of the House, the Senate appointed a conference
  committee to consider the differences between the two houses; and
  that the Senate adopted the conference committee report on H.B. No.
  2093 on May 29, 2011, by the following vote:  Yeas 26, Nays 5.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor