Construction Defect Insurance Bill Introduced in Colorado
On the first day of the 2017 legislative session in Colorado, President of the Senate Grantham (R) and Speaker of the House Duran (D) introduced Senate Bill 17-045 to require courts to allocate defense costs in construction defect claims when more than one insurer has a duty to defend. Senator Angela Williams (D,) a longtime advocate for homeowners living in HOAs, is the co-prime sponsor with the President of the Senate on this bill. The bipartisan nature of this bill is truly impressive.
This bill is intended to have courts fairly and equitably allocate the costs of defending construction defect claims between insurance companies with a duty to defend. It also permits insurance companies to bring claims against builders (referred to as "insureds" or "additional insureds" in SB 45) who did not procure liability insurance during the period of time the alleged claims for defects arose.
This bill is intended to reduce the costs of construction insurance. Builders have long claimed that the costs of procuring construction insurance makes it cost prohibitive to build condominiums. It will be interesting to see how the insurance industry responds to SB 45.
As always, stay tuned to this blog for updates on this important bill and other bills impacting HOAs in Colorado!