Florida Senate - 2006                      COMMITTEE AMENDMENT
    Bill No. SB 682
                        Barcode 142028
                            CHAMBER ACTION
              Senate                               House
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 1           Comm: FAV             .                    
       04/23/2006 01:57 PM         .                    
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11  The Committee on Banking and Insurance (Baker) recommended the
12  following amendment:
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14         Senate Amendment (with title amendment) 
15         Delete everything after the enacting clause
16  
17  and insert:  
18         Section 1.  Section 627.442, Florida Statutes, is
19  created to read:
20         627.442  Construction contract insurance provisions;
21  acceptance, rejection, or application.--
22         (1)  If a written construction contract requires a
23  subcontractor, sub-subcontractor, or materialman to provide an
24  insurance policy or certificate of insurance to the general
25  contractor or another subcontractor for work performed or
26  materials provided, which extends coverage rights to an
27  additional insured, the general contractor or subcontractor is
28  deemed to have accepted the insurance policy or certificate of
29  insurance as conforming to the written construction contract
30  unless the general contractor or subcontractor rejects the
31  insurance policy or certificate of insurance in writing within
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    4:24 PM   04/20/06                             s0682d-bi20-j02

Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 682 Barcode 142028 1 30 business days for commercial construction projects and 7 2 business days for residential construction projects after 3 receipt of the insurance policy or certificate of insurance. 4 The written rejection must specify the reason for rejection. 5 However, the general contractor or subcontractor may not be 6 deemed to have accepted an insurance policy or certificate of 7 insurance that does not comply with the insurance coverage 8 limits specified in the construction contract, that was 9 knowingly and fraudulently altered, or that reflects coverages 10 or conditions that are not contained in the underlying policy. 11 (2) After a general contractor or subcontractor 12 accepts an insurance policy or certificate of insurance or is 13 deemed to have accepted the insurance policy or certificate of 14 insurance, a general contractor or subcontractor may not use 15 the lack of conforming insurance as a reason to reject work 16 previously completed by a subcontractor or sub-subcontractor, 17 reject materials previously supplied by a materialman, or 18 withhold payment for work previously completed or materials 19 previously supplied. However, the general contractor or 20 subcontractor may reject work previously completed or 21 materials previously supplied or withhold payment for such 22 work or materials if the policy or certificate provided by the 23 subcontractor, sub-subcontractor, or materialman: 24 (a) Does not comply with the insurance coverage limits 25 specified in the construction contract; 26 (b) Was knowingly and fraudulently altered or reflects 27 coverages or conditions that are not contained in the 28 underlying policy; or 29 (c) Is canceled, nonrenewed, or materially and 30 adversely altered during the term of the construction 31 contract. 2 4:24 PM 04/20/06 s0682d-bi20-j02
Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 682 Barcode 142028 1 (3) Subsection (1) does not preclude a general 2 contractor or subcontractor from rejecting as nonconforming an 3 insurance policy or certificate of insurance previously 4 accepted or deemed to have been accepted; however, such a 5 rejection shall be in writing and shall specify the reason for 6 rejection. A general contractor or subcontractor who rejects 7 in writing an insurance policy or certificate of insurance as 8 nonconforming and states the specific reason for such 9 rejection may withhold payment for the work performed or 10 materials supplied after the date of the rejection of the 11 policy or certificate. 12 (4) Notwithstanding any other provision in this 13 chapter, any person requiring a workers' compensation policy 14 pursuant to a construction contract may not require that the 15 policy be issued by an insurer or self-insurance fund that is 16 rated by a nationally recognized insurance rating service if 17 the issuing insurer or self-insurance fund is subject to part 18 V of chapter 631. 19 (5) This section shall not apply if at the time of the 20 request for proposals or bids, or prior to the subcontractor, 21 sub-subcontractor, or materialman commencing work or supplying 22 materials under the construction contract, the general 23 contractor or subcontractor provides a sample of an acceptable 24 certificate of insurance or a one-page schedule accurately 25 reflecting all insurance requirements which extend coverage 26 rights to an additional insured for that contract to the 27 subcontractor, sub-subcontractor, or materialman and the 28 insurance provided by the subcontractor, sub-subcontractor, or 29 materialman does not comply with the construction contract. A 30 schedule or sample certificate of insurance issued under this 31 subsection shall not be deemed to amend or modify the contract 3 4:24 PM 04/20/06 s0682d-bi20-j02
Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 682 Barcode 142028 1 between the parties in any way or to waive any requirement of 2 the contract unless the schedule or certificate expressly 3 states that such an amendment, modification, or waiver is 4 intended. 5 (6) For purposes of this section, term: 6 (a) "Residential construction project" means the 7 construction, remodeling, repair, or improvement of a 8 one-family, two-family, or three-family residence not 9 exceeding two habitable stories above no more than one 10 uninhabitable story, and accessory-use structures in 11 connection therewith. 12 (b) "Commercial construction project" means any 13 construction, remodeling, repair, or improvement that does not 14 constitute a residential construction project. 15 (7) This section shall apply to contracts entered into 16 on or after July 1, 2006. 17 Section 2. A contract for the purchase of goods or 18 services may not contain a clause that conditions payment for 19 the goods or services on the receipt of payment from any other 20 person. Any such conditional payment clause is void as a 21 violation of the public policy of this state. 22 Section 3. This act shall take effect July 1, 2006. 23 24 25 ================ T I T L E A M E N D M E N T =============== 26 And the title is amended as follows: 27 Delete everything before the enacting clause 28 29 and insert: 30 A bill to be entitled 31 An act relating to construction contracts; 4 4:24 PM 04/20/06 s0682d-bi20-j02
Florida Senate - 2006 COMMITTEE AMENDMENT Bill No. SB 682 Barcode 142028 1 creating s. 627.442, F.S.; specifying 2 acceptance of certain insurance provisions of a 3 construction contract under certain 4 circumstances; providing exceptions; 5 prohibiting certain actions after acceptance of 6 such provisions; providing an exception 7 authorizing such actions under certain 8 circumstances; authorizing contractors or 9 subcontractors to reject certain accepted 10 construction contract insurance provisions as 11 nonconforming under certain circumstances; 12 authorizing such contractors and subcontractors 13 to withhold payment for work performed or 14 materials supplied under certain circumstances; 15 prohibiting rejecting certain policies of 16 insurance on certain grounds; specifying 17 nonapplication of construction contract 18 insurance provisions under certain 19 circumstances; providing construction; 20 providing definitions; providing for 21 application to certain contracts; providing 22 that a contract for the purchase of goods or 23 services may not contain a clause that 24 conditions payment for the goods or services on 25 the receipt of payment from any other person; 26 providing an effective date. 27 28 29 30 31 5 4:24 PM 04/20/06 s0682d-bi20-j02