New law affects group contractor liability insurance

HB 2751, passed by the 2007 Oregon Legislature, implements one of the recommendations of the Construction Claims Task Force, and is aimed at making group contractor liability insurance more available. HB 2751 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 law change, group policies fell under a general statute (ORS 737.600) that prohibits grouping of property and casualty risks unless the insurer can demonstrate that the grouping meets a set of standards designed to prevent discriminatory treatment. There are a number of exceptions in ORS 737.600, for groupings that make sense and should not have to be justified on a case-by-case basis. HB 2751 adds group contractor liability to these 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 require 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.

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.

HB 2751 also does not change the law that governs oversight of large projects in Oregon that include worker’s compensation, which are referred to as “Wrap Ups.” Those filing requirements are outlined in ORS 737.602 for projects in excess of $90 million completed within a defined period.