Senate Bill sb0682
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 SB 682
By Senator Bennett
21-570-06
1 A bill to be entitled
2 An act relating to construction contracts;
3 creating s. 627.442, F.S.; providing for the
4 rejection of construction contracts when
5 certain subcontractors, sub-subcontractors, or
6 materialmen do not provide required insurance
7 coverage; prohibiting a general contractor or
8 subcontractor from rejecting work completed,
9 rejecting material supplied, or withholding
10 payment due to lack of conforming insurance
11 following acceptance of a policy or certificate
12 of insurance; providing certain exceptions;
13 authorizing a general contractor or
14 subcontractor to reject a policy or certificate
15 in writing as nonconforming and withhold
16 payment for work performed or materials
17 supplied; providing an effective date.
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19 Be It Enacted by the Legislature of the State of Florida:
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21 Section 1. Section 627.442, Florida Statutes, is
22 created to read:
23 627.442 Construction contract insurance provisions;
24 acceptance, rejection, application.--
25 (1) If a written construction contract requires a
26 subcontractor, sub-subcontractor, or materialman to provide a
27 policy or certificate of insurance to the general contractor
28 or another subcontractor for work performed or material
29 provided which extends coverage rights to an additional
30 insured, the general contractor or subcontractor may accept
31 the policy or certificate or may reject it as being
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CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 SB 682
21-570-06
1 nonconforming before the date the subcontractor or
2 sub-subcontractor commences work or the materialman delivers
3 material.
4 (2)(a) If the general contractor or subcontractor does
5 not reject the policy or certificate in writing and state the
6 specific reasons for the rejection within 3 business days
7 after receiving the policy or certificate, the general
8 contractor or subcontractor shall be deemed to have accepted
9 the policy or certificate for work performed or materials
10 supplied until such time as the policy or certificate is
11 specifically rejected in writing. However, the general
12 contractor or subcontractor may not be deemed to have accepted
13 a policy or certificate that does not comply with the
14 insurance coverage limits specified in the construction
15 contract, that was knowingly and fraudulently altered, or that
16 reflects coverages or conditions that are not contained in the
17 underlying policy.
18 (b) After accepting a policy or certificate, a general
19 contractor or subcontractor may not use the lack of conforming
20 insurance as a reason to reject work previously completed by a
21 subcontractor or sub-subcontractor, to reject materials
22 previously supplied by a materialman, or to withhold payment
23 for work previously completed or for material previously
24 supplied. However, the general contractor or subcontractor may
25 reject work previously completed or material previously
26 supplied or may withhold payment for such work or materials if
27 the policy or certificate provided by the subcontractor,
28 sub-subcontractor, or materialman:
29 1. Does not comply with the insurance coverage limits
30 specified in the construction contract;
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CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 SB 682
21-570-06
1 2. Was knowingly and fraudulently altered or reflects
2 coverages or conditions that are not contained in the
3 underlying policy; or
4 3. Is canceled, nonrenewed, or materially and
5 adversely altered during the term of the construction
6 contract.
7 (3) If the general contractor or subcontractor rejects
8 a policy or certificate as nonconforming in writing and states
9 the specific reasons for rejection, any provision of the
10 contract requiring such insurance is unenforceable, and
11 payment may be withheld for work performed or materials
12 supplied after the date of the rejection of the policy or
13 certificate.
14 Section 2. This act shall take effect July 1, 2006.
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17 SENATE SUMMARY
18 Creates a right for certain contractors or subcontractors
to reject construction contracts because a subcontractor,
19 sub-subcontractor, or materialman does not provide
certain insurance coverage required by the contract.
20 Establishes specific grounds and procedures for such
rejection.
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CODING: Words stricken are deletions; words underlined are additions.