“I‘WEA OMNEP GENERAL, 

OF TEXAS 

PRICE DANIEL 

AUHTIN 11. -rExAm 

ATTORNEY GENERAL 

August 6, 1949 

Hon. William J. Murray, Jr., Chairman 

Railroad Commission of Texas 

Austin, Texas 

Attention: Mr. S. C. McIntosh 

Dear Mr. Murray: Opinion No. v-875 

Re: Several questions relative 

to the provisions of S. B. 

481, 5lst Legislature. 

You recently requested the opinion of the Attorney 

General as to whether or not the Railroad Commission can accept a bond, or bonds, in lieu of the insurance policies required by the provisions of the second paragraph of Section 

11, Article 6053, V.C.S,, as amended by S. B. 481, 51st Legislature. By letter dated July 27th, you requested our opinion 

on several other questions relative to the provisions of S.B. 

481, as follows: 

"The request forwarded to you on July 14, 

for an opinion regarding S. B. 481, amending 

Set tion 11 of Chapter 358, Acts of the 49th 

Legislature, did not include three points on 

which we now desire your consideration and 

opinion. 

1. S. B. 481 sets out that Manufacturer's 

and Contractor's Liability IS one of the 

policies which a licensee shall carry. 

The Manufacturer's and Contractors liability policy form, which has been approved 

by the Board of Insurance Commissioners, 

under Definition of Hazards show five divisions as follows: 

1. Premises 

2. Elevators 

3. Independent Contractors 

2: 

Products 

Contractual 

"Obviously a L. P. Gas licensee's opera- 
Honorable William J. Murray, Jr., page 2 (V-875) 

tlons would not embrace all of the hazards 

above mentioned. However, since S. B. 481 

does not exclude any of the named hazards, 

and since a licensee In making an installation of a L. P. Gas container and/or L. P. 

Gas piping system, which If carelessly, negligently or improperly installed, may be the 

cause of an accident after the licensee's 

workmen have completed,the installation and 

left the customer's premises, is it mandatory on the Railroad Commission to require 

the filing of evidence of Products Liability 

coverage? 

2. The licensed manufacturer of L. P. 

Gases or L. P. Gas containers, or L. P. Gas 

equipment has heretofore been required to 

carry Products Liability insurance. Under 

the provisions of S. B. 481, is it mandatory 

on the Commission to require the filing of 

Products Liability by such manufacturers? 

3. S. B. 

7, 8, and 10 

256, amending Subsections 6, 

'of Section 1 of S. B. 269, 

Chaoter 358. in Section 7, Par. (b) created 

a Limited-License wherein licensees'are authorized to service and/or repair, and/or 

connect and/or adjust ranges and/or cookIng 

appliances, and/or space heaters, floor 

furnaces and water heaters excepted. 

"Under the provlsions of S. B. 481, what 

insurance may the ConmissIon legally require 

such limited licensees to carry?" 

Senate Bill No. 481, 51st Legislature, amending Section 11, Article 6053, V. C. S., reads as follows: 

"No license shall be issued pursuant to 

this section unless such licensee shall first 

file with the Commission a surety bond in the 

sum of Two Thousand ($2,000.00) Dollars with 

a bonding company authorized to do business in 

Texas. All such bonds shall provide that the 

obligator therein will indemnify and pay the 

State of Texas, to the extent of the face 

amount thereof, all judgments which may be 

recovered In the name of the State of Texas 

against such licensee, during the termof such 

bond and proximately caused by any violation, 
Honorable William J. Murray, Jr., page 3 (V-875) 

by said licensee, of the terms of this Act or 

any orders or rules promulgated by the Railroad Commission as authorized by this Act. 

"In addition to the bond herein required, 

such licensee shall be obligated to procure 

from some reliable insurance carrier qualified to do business in the State of Texas, and 

keep same in force so long as they shall continue in business , policies of insurance in 

the following kinds and amounts, said policies 

to guarantee payment of damages which,proximately result from acts of negligence, while 

said licensee Is engaging in any of the activlties as hereln provided: 

"1 . A public liability and property 

damage insurance policy on each and every 

motor vehicle, including trailers designed 

for use therewith on highways, used in the 

transportation of liquefied petroleum gases, 

of Five Thousand ($5,000.00) Dollars for bodily 

Injuries to any one' erson, or a total of TB~ 

Thousand ($10,000.00 P Dollars for bodily injuries for any one accident involving two or 

more persons, and property damage for any one 

accident of Five Thousand ($5,000.00) Dollars. 

"2 . A manufacturess and contractors 

liability policy of Five Thousand ($5,000.00) 

Dollars for an 

Ten Thousand ( i 

one~person, and not to exceed 

lO,OOO.OO) Dollars for any one 

accident in which two or more persons'are insjured, and of Five Thousand ($5,000.00) Dollars total property damage for any one accident. 

“3 . A workmen's compensation or employers' liability policy. 

"Provided, however, that this section 

shall not be applicable unless and until such 

policies are available for purchase; and further provided, that such policies of insurante shall be approved by the Railroad CommlssIon of Texas. Provided further, however, 

that nothing in this Act shall prevent or prohlbit such licensee from purchasing policies 

of insurance of a greater coverage than the 

amounts specified herein." 
Honorable William J. Murray, Jr., page 4 (v-875) 

We shall answer your 

ted. 

questions in the order submit1. Can the Railroad Commission accept 

a bond or bonds in lieu of the insurance policies required by the second paragraph of 

Section 11 Article 6053, V.C.S., as amended 

by S. B. 481, 51st Legislature? 

S. B. No. 481, quoted above , provides that licensees 

under Article 6053 shall be obltgated to procure from some 

reliable insurance carrier specified policies of Insurance. 

No provision Is made in said bill for such licensees to procure a bond or bonds in lieu of the specified Insurance policies. The bill is clear and unambiguous and not, therefore, 

subject to construction. 39 Tex. Jur. 1.61, Statutes, Section 

88. 

We cannot by departmental construction amend the bill 

so as to allow licensees to procure bonds in lieu of insurance 

policies. The very purpose of S. B. 481, as evidenced by the 

title thereof, is to "clarify and specify the kind and amounts 

of insurance coverage to be carried by every licensee." To 

amend the bill by departmental construction so as to allow 

bond coverage in lieu of Insurance would defeat the express 

purpose of the Legislature ln enacting the bill. 

You are accordingly advised that the Rallroad Commission cannot accept a bond or bonds in lieu of the Insurance 

policies required by the provlsions of the second,paragraph 

of Section 11, Article 6053, as amended by 5. B. 481, 51st 

Legislature. 

2. Since the licensee in making an installation of a liquefied petroleum gas container and/or liquefied petroleum gas piping 

system, which if carelessly, negligently, or 

improperly installed, may be the cause of an 

accident after the licensee's workmen have 

completed the Installation and left the cus' 

tamer's premises, is it mandatory for the Railroad Commission to require the filing of evidence of products liability coverage? 

The second paragraph of S. B. 481 provides in part: 

I! . . ..such licensee shall be obligated to 

procure .*. polI,cies of insurance in the following kinds and amounts, said policies to guarantee 

payment of damages which proximately result from 
Honorable William J. Murray, Jr., page 5 (V-875) 

acts of negligence, while said licensee is engaging in any of the activities as herein provided......" (Underscoring ours) 

The installation of liquefied petroleum gas containers 

and/or piping system are activities provided for in Article. 

6058. (Section 7 (a), Article-6053, as amended by S. B. 256, 

Acts of 51st Legislature, 1949, Chapter 220, p. 411.) Products liability coverage would cover damages arising from accidents occurring after the Insured has completed lnstallation and left the customer's premises. It cannot be disputed 

that accidents canand do occur after completion of installation and after the licensee has left the premises, causing 

damages which proximately result from acts of negligence committed by the licenseewhile he was engaged in Installing the 

equipment and/or piping system. In fact, It would be safe to 

say that a great portion of all damages which,proximately result from acts of negligence while the licensee Is engaged in 

installing the equipment and/or piping system ~111 arise from 

accidents occurring after the licensee has left the premises 

of the customer. 

S. B. 481 obligates licensees to procure only three 

policies of insurance. Those are: (1) public liability and 

property damage on motor vehicles used in the transportation 

of liquefied petroleum gases; (2) a manufacturer's and contractor's liability policy; and (3) a Workmen's Compensation 

or Employer's liability policy. Clearly, the public liability and property damage policy on automobiles used in the 

transportation of liquefied petroleum gases, and Workmen's 

Compensation or employer's liability policy, do not provide 

products liability coverage. You state in your letter and 

have furnished evidence that the Board of Insurance Commissioners have approved a manufacturer's and contractor's liability policy which Includes products liability coverage. 

If such a manufacturer's and contractor's liability policy 

IS in fact available for purchase, it is the duty of the 

Railroad Commission to require licensees to procure such a 

policy. The products liability coverage contained therein 

is necessary In order to guarantee payment of damages which 

proximately result from acts of negligence, while the licensee 

is engaging in an activity provided for in Article 6053. 

You are accordingly advised that the Railroad Commission should not approve a manufacturer's and contractor's liabillty policy from licensees engaged in Installing liquefied 

petroleum gas containers and piping systems which does not provide products liability coverage, if such policy is available 

for purchase. 
Honorable William J. Murray, Jr., page 6 (V-875) 

3. Is it mandatory for the Railroad Commlsslon to require the filing of evidence of products liability coverage by manufacturer's of 

liquefied petroleum gases or liquefied petroleum 

gas containers or liquefied petroleum gas equipment? 

The manufacture of liquefied petroleum gases is not 

an activity provided for in Article 6053. Accordingly, such 

manufacturers are not required to procure products llabillty 

coverage which would cover damages arising from an accident 

occurring after the gases had passed into the possession of a 

customer, which proximately resulted from negligence of the 

manufacturer while manufacturing the gases. 

However, the manufacture of liquefied petroleum gas 

containers and e uipment is an activity provided for in Article 

6053 (Section 7 9- a), Article 6053, as amended-by Senate Bill 

256, Acts 51st Leglslature,,l949, Chapter 220, page 441). 

Section 11 thereof requires such manufacturers to provide 

coverage for damages proximately resulting from an act of 

negligence, while engaged in an activity provided for ln 

Article 6053. Manufacturers of liquefied petroleum gascontalners and equipment must, therefore, procure a manufacturers 

and products liability policy which provides products liability coverage. 

We invite your attention to the fact that Section 6 of 

Article 6053, V.C.S., as amended by S. B. 256, Acts 51st Legislature, 1949, Chapter 220, page 411, provides as follows: 

"(b) . Nothing contained in this Act shall 

apply to the sale in the ordinary courseof businessof any part or any appliance which may be 

employed for uses other than as an integral part 

of a liquefied gas system when the seller does 

not service, make repairs or permanent connection 

to any such liquefied gas system, as long as said 

appliance or container is approved under the 

standards set by the Railroad Commission of Texas. 

Nor shall this Act apply to containers used in 

accordance with and subject to the regulation of 

the Interstate Commerce Commission, and containers 

which are owned and used by the Federal Government." 

Those engaged solely in the activities provided in this 

section would not be required to secure a license from the 

Railroad Commission and would not, therefore, be required to 

comply with Section 11. 
- . . I 

Honorable William J. Murray, Jr., page 7 (V-875) 

4.~ S.B. 256, Acts 51st Legislature, 1949; 

Ch."220, p. 411, amended Article 6053, V.C.S., 

so as to authorize the Railroad Commission to 

issue a limited license. Under the provisions 

of 5. B. 481, what insurance may the Commission 

legally require such limited licensees to carry? 

S. B. 256 Acts, 5lst Legislature 1949 Ch. 220 .p. 

411. amended Artiile 6053 by adding the&o Seition 7(bf, 

whi;h reads as follows: 

"(b) . There is hereby created a limited 

license under the provisions of this Act, wherein persons, firms, corporations or associations 

are authorized to service and/or repair and/or 

connect and/or adjust ranges and/or cooking appliances, and/or space heaters, floor furnaces 

and water heaters excepted, when done with approved llquefied petroleum gas connectors, and 

when connected to existing piping outlets of approved llquefled petroleum gas facilities, and 

when such appliances as specified herein meet the 

requirements of the RaIlroad Commission of Texas 

for use with liquefied petroleum gas as a fuel. 

"Persons, firms, corporations or associations qualifying under the provlslons of the 

limited license provided for herein, shall apply 

to the Railroad Commission of Texas for a license so to do, such application to be in wrltlng, and shall contain such information as the 

Rallroad Commission shall prescribe. No such 

license shall be issued until the Commissions has 

determined that the applicant has made good and 

sufficient proof that he can and will meet all 

safety requirements provided In this Act and by 

the rules and regulations of the Railroad Commission, and the Commlssion finds that such applicant is qualified and the evidence adduced 

justifies issuance of such lImited license." 

Such limited l~icensees are licensed under the provisIons of Article 6053 and are therefore required to carry the 

policies of insurance set forth in Section 11 of said Article, 

as amended by S. B. 481, 51st Legislature, that are applicable 

to their activities. You are accordingly advised that such 

limited llcenseees must procure the insurance policies which 

are applicable to the service to be performed ~bg them. As 

l-lmlted licensees will not be transporting liquefI.ed petroleum 

gases, they will not be required to obtain the public liability 
Bonorable William J. Murray, Jr., page 8 (v-875) 

and property damage insurance pollcg on motor vehicles. ROWever, it Is readily seen thatthe manufacturer's and contractor's liability pollcg and Workmen's Compensation or Employer's 

Liability policy will be applicable to such licensees and must 

be procured by them. 

SUMMARY 

The Railroad Commission has no authority 

to accept bonds in lieu of the insurance policies required by the provisions of the second 

paragraph of Sectionll; Article 6053, V.C.S., 

as amended by S. B. 481, 51st Legislature. 

Llcensees engaged in business of'manufacturing liquefied petroleum containers and equipment, and licenseees engaged. In the installation 

of such containers and equipment must procure a 

manufacturer's and contractor's liability pol-- 

Icy which provides'products liability coverage, 

if such policy Is available for purchase. 

Limited licensees under the prov'lsion of 

Section 7(b); Article 6053, V.C.S., as amended 

bg.S. B, 256, Acts 51st Legislature, 1949, ch. 

220, p- 441, must procure the insurance policies 

provIdea for in Section 11, Article 6053, as 

amended, which are applicable to the activities 

engaged in by them. 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By s/lhrwarcl M. Goolsby 

Durwara M. Goolsbg 

Assistant 

DMG:db:wc 

APPROVED: 

s/Joe R. Greenhill 

FXRST ASST. ATTORNEY GENERAL