Bill Text: IL HB5512 | 2023-2024 | 103rd General Assembly | Introduced
Bill Title: Amends the Illinois Insurance Code. Sets forth findings and definitions. Provides that the Department of Insurance is authorized to enter into a contract with a private insurance broker to establish an Owner-Controlled Insurance Program. Provides that the Owner-Controlled Insurance Program shall provide specified forms of insurance, if applicable, to construction contractors for the purpose of satisfying requirements to contract with a construction agency. Requires the Department to comply with the Illinois Procurement Code when procuring a contract for an Owner-Controlled Insurance Program. Provides that a contract between the Department and an insurance broker for the provision of an Owner-Controlled Insurance Program shall not exceed 5 years in duration. Provides that all tiers of construction contractors shall be eligible to obtain any form of insurance required to contract with a construction agency for the purposes of satisfying the insurance obligations necessary to execute a construction contract for a construction agency. Effective immediately.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-02-09 - Referred to Rules Committee [HB5512 Detail]
Download: Illinois-2023-HB5512-Introduced.html
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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois, | |||||||||||||||||||||||||||
3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | |||||||||||||||||||||||||||
5 | adding Article XLVIII as follows:
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6 | (215 ILCS 5/Art. XLVIII heading new) | |||||||||||||||||||||||||||
7 | ARTICLE XLVIII. OWNER-CONTROLLED INSURANCE PROGRAM | |||||||||||||||||||||||||||
8 | (215 ILCS 5/1800 new) | |||||||||||||||||||||||||||
9 | Sec. 1800. Findings. The General Assembly finds the | |||||||||||||||||||||||||||
10 | following: | |||||||||||||||||||||||||||
11 | (1) Small contractors, including many small businesses, | |||||||||||||||||||||||||||
12 | minority-owned businesses, women-owned businesses, and | |||||||||||||||||||||||||||
13 | businesses owned by persons with disabilities often struggle | |||||||||||||||||||||||||||
14 | to find competitive insurance options that meet the standards | |||||||||||||||||||||||||||
15 | required for public construction projects, and these | |||||||||||||||||||||||||||
16 | businesses particularly struggle to obtain insurance options | |||||||||||||||||||||||||||
17 | that are affordable. High insurance premiums make these | |||||||||||||||||||||||||||
18 | businesses less competitive as prime contractors and | |||||||||||||||||||||||||||
19 | subcontractors because the contractors and subcontractors pass | |||||||||||||||||||||||||||
20 | along increased costs to public owners in the form of higher | |||||||||||||||||||||||||||
21 | bid prices. | |||||||||||||||||||||||||||
22 | (2) Under an Owner-Controlled Insurance Program, a single |
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1 | policy held by the owner covers the owner and contractors of | ||||||
2 | all levels for the entire construction project or group of | ||||||
3 | projects, which reduces barriers by allowing contractors that | ||||||
4 | historically struggle to obtain insurance at an affordable and | ||||||
5 | competitive price to not only bid but be awarded the contract. | ||||||
6 | (3) In a conventional project structure, in which many | ||||||
7 | contractors provide insurance to the public owner, disputes | ||||||
8 | between different carriers over liability and coverage consume | ||||||
9 | considerable time and resources, escalating costs. In | ||||||
10 | contrast, an Owner-Controlled Insurance Program can provide | ||||||
11 | more efficient coverage through a single policy. Further, when | ||||||
12 | a public owner implements an Owner-Controlled Insurance | ||||||
13 | Program, the owner is relieved of the burden of monitoring | ||||||
14 | that each contractor maintains coverage if the project | ||||||
15 | continues beyond the length of an applicable policy. | ||||||
16 | (4) Owners, in this case, the State of Illinois, can | ||||||
17 | attain economies of scale when using an Owner-Controlled | ||||||
18 | Insurance Program versus a traditional insurance approach. | ||||||
19 | (5) Owner-Controlled Insurance Programs also create safe | ||||||
20 | worksites. In contrast to a conventional project structure | ||||||
21 | wherein contractors and subcontractors hold multiple policies | ||||||
22 | with separate safety requirements, Owner-Controlled Insurance | ||||||
23 | Programs typically harmonize safety standards across | ||||||
24 | contractors. Additionally, Owner-Controlled Insurance | ||||||
25 | Programs can allow for an integrated data platform to | ||||||
26 | facilitate safety data collection and review. |
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1 | (6) It is in the interest of the State of Illinois to | ||||||
2 | ensure efficient and uniform insurance coverage required | ||||||
3 | throughout the duration of construction agencies projects. | ||||||
4 | (7) It is in the interest of the State of Illinois to use | ||||||
5 | economies of scale to be good stewards of taxpayer dollars. | ||||||
6 | (8) It is necessary to reduce barriers of entry to assist | ||||||
7 | in the development of new and emerging construction | ||||||
8 | contractors. | ||||||
9 | (9) It is in the best interest of the State of Illinois to | ||||||
10 | promote safe worksites
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11 | (215 ILCS 5/1805 new) | ||||||
12 | Sec. 1805. Definitions. In this Article: | ||||||
13 | "Construction" means building, altering, repairing, | ||||||
14 | improving, or demolishing any public structure or building, or | ||||||
15 | making improvements of any kind to public real property. | ||||||
16 | "Construction" does not include the routine operation, routine | ||||||
17 | repair, or routine maintenance of existing structures, | ||||||
18 | buildings, or real property. | ||||||
19 | "Construction agency" means the Capital Development Board | ||||||
20 | for construction or remodeling of State-owned facilities; the | ||||||
21 | Illinois Department of Transportation for construction or | ||||||
22 | maintenance of roads, highways, bridges, and airports; the | ||||||
23 | Illinois Toll Highway Authority for construction or | ||||||
24 | maintenance of toll highways; Central Management Services; | ||||||
25 | public institutions of higher education as defined in |
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1 | subsection (f) of Section 1-13 of the Illinois Procurement | ||||||
2 | Code; and any other State agency entering into construction | ||||||
3 | contracts as authorized by law or by delegation from the chief | ||||||
4 | procurement officer. | ||||||
5 | "Construction contractor" means any person having a | ||||||
6 | contract, as defined in Section 1-15.30 of the Illinois | ||||||
7 | Procurement Code, with a State agency. | ||||||
8 | "Department" means the Department of Insurance. | ||||||
9 | "Owner-Controlled Insurance Program" means a single | ||||||
10 | insurance policy that the State or any municipality may use | ||||||
11 | for construction projects that covers the owner and | ||||||
12 | contractors of all levels for the entire project or group of | ||||||
13 | projects.
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14 | (215 ILCS 5/1810 new) | ||||||
15 | Sec. 1810. Owner-Controlled Insurance Program. | ||||||
16 | (a) The Department is authorized to enter into a contract | ||||||
17 | with a private insurance broker to establish an | ||||||
18 | Owner-Controlled Insurance Program. The Owner-Controlled | ||||||
19 | Insurance Program shall provide the following forms of | ||||||
20 | insurance, if applicable, to construction contractors for the | ||||||
21 | purpose of satisfying requirements to contract with a | ||||||
22 | construction agency: | ||||||
23 | (1) general and excess liability; | ||||||
24 | (2) professional liability; | ||||||
25 | (3) builders' risk; |
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1 | (4) contractors' pollution liability; | ||||||
2 | (5) workers' compensation; and | ||||||
3 | (6) cyber liability. | ||||||
4 | (b) The Department shall comply with all applicable | ||||||
5 | provisions of the Illinois Procurement Code when procuring a | ||||||
6 | contract for the provision of an Owner-Controlled Insurance | ||||||
7 | Program. | ||||||
8 | (c) A contract between the Department and an insurance | ||||||
9 | broker for the provision of an Owner-Controlled Insurance | ||||||
10 | Program shall not exceed 5 years in duration.
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11 | (215 ILCS 5/1815 new) | ||||||
12 | Sec. 1815. Eligibility. All tiers of construction | ||||||
13 | contractors shall be eligible to obtain any form of insurance | ||||||
14 | required to contract with a construction agency, as authorized | ||||||
15 | in Section 1810, for the purposes of satisfying the insurance | ||||||
16 | obligations necessary to execute a construction contract for a | ||||||
17 | construction agency.
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