Oregon has implemented a new law aimed at making group contractor liability insurance more available. HB 2751 implements one of the recommendations of the The Construction Claims Task Force, and adds group contractor liability to the existing exceptions to the law in order to make it easier for admitted carriers to compete, if they choose to, in the market for group project liability insurance.
Prior to the change in current law, an insurer was not able to offer a preferred rate or plan that is not offered to the public generally. Law, group policies fell under a general statute (ORS 737.600) that prohibited grouping of property and casualty risks unless the insurer could demonstrate that the grouping met a set of standards designed to prevent discriminatory treatment. There are a number of exceptions in ORS 737.600, for groupings that do not have to be justified on a case-by-case basis. HB 2751 adds group contractor liability to those exceptions.
Also, prior to the change in law, writing coverage for a group of this nature was subject to ORS 737.600 and OAR 836-042-0410, which required additional documentation about a group’s risk management plan. This documentation is no longer necessary. The standard filing requirements for ratemaking found in the other sections of ORS 737 remain in effect.
HB 2751 does not change the law that governs oversight of large projects in Oregon that include worker’s compensation, which are referred to as “wrapups”. Those filing requirements are outlined in ORS 737.602 for projects in excess of $90 million completed within a defined period.
The group policy normally only applies to the specific premises or project under construction, but it serves the purpose of recognizing the exposure at hand and offers coverage in areas where many sub-contractors have exclusionary language on their basic policy for all other general operations.
The group contractor liability policies written for specific projects do not replace the required individual coverage necessary to obtain a contractor’s license in Oregon. Each contractor would still carry his or her own general liability policy for overall exposure.
For more information, visit http://insurance.oregon.gov.
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