Bill > H5812

This bill amends Chapter 27-7 of the General Laws regarding liability insurance by introducing a new requirement for insurance policies covering property damage or personal injuries. Specifically, the bill mandates that such policies must clearly state a policy limit that is fully available for paying claims, and critically, prohibits using any portion of that policy limit to cover legal defense costs. The provision applies to liability insurance policies except for workers' compensation policies (which are covered under chapters 29-38 of title 28). In practical terms, this means that the entire policy limit must be reserved exclusively for compensating the injured party, with defense attorneys and legal expenses needing to be paid from sources outside the policy's stated limit. This change could potentially impact how insurance companies structure their policies and how legal defense is funded in liability cases. The bill would take effect immediately upon its passage.

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