Insurer Group Says Amendments to Arkansas Bill Prevent Coverage Expansion

Amendments to insurance-related legislation in Arkansas will prevent unintended expansion of commercial liability insurance coverage in that state, according to an insurance company trade group.

The American Insurance Association (AIA) said it was successful in adding needed amendments to a commercial general liability bill in Arkansas. As originally drafted, the bill would have expanded the scope to include a number of additional types of coverage and would have broadened the current definition of “occurrence” well beyond the norm. The legislation with AIA’s amendments, HB 1439, was signed into law on March 23, 2011.

Specifically, the language in HB 1439 originally covered “commercial liability policies.” The bill was subsequently amended to clarify that this law will apply to “commercial general liability policies.” AIA pointed out that this omission of the word “general” expanded the bill to such a great number of additional policies, that the legislation would have much greater consequences than was ever intended.

The final bill also included AIA’s suggestion that the definition of “occurrence” be more consistent with the current laws dealing with commercial general liability policies.

As originally drafted the bill would have defined an occurrence to include: accidents, conditions or repeated exposure to substantially the same general harmful conditions, and property damage or bodily injury resulting from faulty workmanship.

AIA opposed this language based on the vagueness of the term “faulty workmanship” and inconsistency with currently law and policy language. The final bill retains the faulty workmanship language; however amendments were adopted to accurately reflect the intent of a commercial general liability policy, which is to cover accidents.

Source: AIA

Topics Carriers Legislation Arkansas