October 24, 2017

SB 17-045: Requiring Equitable Allocation of Costs in Construction Defect Claims

On January 11, 2017, Sens. Angela Williams & Kevin Grantham and Reps. Cole Wist & Crisanta Duran introduced SB 17-045, “Concerning a Requirement for Equitable Allocation of the Costs of Defending a Construction Defect Claim.”

In a construction defect action in which more than one insurer has a duty to defend a party, the bill requires the court to apportion the costs of defense, including reasonable attorney fees, among all insurers with a duty to defend. An initial order apportioning costs must be made within 90 days after an insurer files its claim for contribution, and the court must make a final apportionment of costs after entry of a final judgment resolving all of the underlying claims against the insured. An insurer seeking contribution may also make a claim against an insured or additional insured who chose not to procure liability insurance for a period of time relevant to the underlying action. A claim for contribution may be assigned and does not affect any insurer’s duty to defend.

The bill was introduced in the Senate and assigned to the Business, Labor, & Technology Committee. It is scheduled for hearing in committee on February 2 at 2 p.m.