Message from our lobbyists:
All,
Looks like we finally killed SB 885 (Wolk). I was just informed that the author has pulled the bill from tomorrow’s hearing. The bill was being sponsored by the American Council of Engineering Companies of California. We were strongly opposed to this measure.
The design professionals argument for the bill was that, a design professional’s Errors & Omissions professional liability insurance does not provide coverage for the defense of claims against other persons and entities involved in construction projects. It only covers claims related to the negligent acts of the design professional. While this may be true, the bill did nothing to address the insurance issue, but to only remove the design professionals from the first dollar defense process and transfer those costs to others.
SB 885 would have prohibited contracts that require state licensed design professionals, including engineers, land surveyors, architects, and landscape architects, to defend claims made against other persons or entities involved in construction projects (i.e. if the defect or injury claim was tendered to the owner or contractor). The bill provided that the licensed design professionals, including engineers, land surveyors, architects, and landscape architects could be required to reimburse defense costs and damages to those who provided the defense on their behalf upon adjudication of the claim against the owner or contractor or both and where the design professional was found to have fault. Unfortunately, this would have transferred their first dollar defense costs to others including our contractors and left us in the position of having to file a secondary law suit to recoup costs that we incurred due to design flaws.
We were able to persuade the Assembly Judiciary Committee staff and its Chairman (Assembly Member Stone) to propose an alternate solution to Senator Wolk and the sponsors if they wanted to move their bill out of committee tomorrow. The proposal stated that design professional’s Errors & Omissions insurance be required to cover an additional insured, and require that only design professionals with this type of insurance be eligible to bid work in California. We knew It was highly unlikely that the author and sponsor would agree to these amendments, but they addressed the stated need for the bill. The Chair’s proposed amendments, plus the Republican Caucus’s planned oppose recommendation, made a difficult path forward for the bill. Since there isn’t another opportunity for a Assembly Judiciary Committee hearing this session, it looks like we are done with this bill for now. I will let you know if anything changes or if there are any surprises. Attached is a copy of our coalition opposition letter if you need further detail. Please don’t hesitate to call me if you have questions.