### THEA~TORNEYGENERAL
OFTEXAS

PRICE DANIEL ATTORNEY

GENERAL AUWTINH.%-EXAE

April 28, 1,949

Mr. S. C. MoIntosh, Director Gas Utilities Divlsi~ Railroad Commission of Texas Austin, 'l!sxas Opinion No. V-817

Be: Theauthority of the,Rall-, road Commlssion'to requlrb that installers of butane squipmont carry product8 liability insurance.
Dear Mr. McIntosh:

Your letter requesting the opinion of the Attorney General on the above question reads as follows:

AI would like to call .OW$ rttentlon to the second paragraph of,,Sec tion 11, Article 6053, as amended, V.A.C’iS., which prescribes the'Lnsurance.that the'lloefisee, ynder the Kct, muat obtain. It ha6 bbep. tile policy 0r this Division in the paet'to~requlrb the licensei3 to carry tlprse separate polioles; namely: llbrkmefi~s Compensatlon,,Manufacturerrs land Ccmt+actorts Publla Liability Andy Automobile Bodily Injury and Property Damage.' Wefelt that these-three types of .policies qere necessary in order to protect the amployees of the licensee and the public et large under the ab6ve, mentioned SsQtion of the above mentioned Article.
"It will be.grsatly appreolated by me iS yffur office would rsndor 8n opinion as to whether or not we a+e in a position to flurther require Products Liability Insurance under the above mentioned Section and.Artlcle., Products Liability Insurance would insure the licensee for any acoident that might occur due to iaulty installation of butane equipment fram the time the equipment is installed through the life of the policy."Mr. S. C. McIntosh, Page 2 (V-817)

Seotion 11, Article 6053, V.C.3: reads, ln part, as follows2

“In addition to the ,bondher&n required, such licensee shall be obligated to procure frcm some reliable insurance or surety cqupany qualified to do business in the State of Texas, end keep same in forae 80 long as they shall continue in business, a policy of lnsuranoe or surety bond which shall guarantee the payment of all damages which proximately result **from** any act of negligence, while engaglng,in any of the activities as herein provided, on the part of said licensee, their agents and employees, to both the employees of said licensee and also to the publio generally ,said policy or bond to be in the. s= of not less than Ten Thousand ($10,000.00) Dollars for perscoal lnjury for any one acoident, andnot less than Five Thousand ($5,000&O) Dollars for property damage for any one accident. Provided that this seotion shall not be applloablo unless and until suoh bonds or pofloiesr of iaauranoe

are available for purohase end further provided that such bonds or policies of insurance shall be approved by the Railroad Conanlssion of Texas.” Section 6 of Article 6053 provides that the Railroad Commission shall have “full power and authority to adopt and promulgate such rules and regulations as shall be reasonably necessary to carry out the purpose of this Act and for the proteotion, help, welfare and safe $ of the public and persons using such materials.

. . . It is noted that all lioensees under the provisions of.,Artiole 6053 are obligated to procure and maintaln a polioy of lnsuranoe or a surety b,ondwhich shall guarantee the payment of all damagrs to both the employees of the licensee and also to the pub110 generally which proximately result from any aot of negligence on the part of said licensee, their agents and employees, while engaging in any of the aativlties provided in the 8tatute. You state that the Products Mability Insurance would insure the lloense for any accident that might oacur due to faulty inseallation of butane equipment frapathe ttie the equipment is installed through the life of the policy.Mr. S. C. McIntosh, Page 3 (V-817)

It Is evident that damages to the public generally could occurafter the completionof Installation ofbutane equipment,which proximatelyresult from an act ofnegligence ccmmittedby the licensee, Itsagents or employees,while Installingthe equipment. As you have the authority topromulgate such rules and regulationsas shallbe reasonablyneoessary for theprotection and safety of thepublic, It is our opinion thatyouhave theauthority to require licenseesunder theprovisions ofArticle 6053 toprocure andmaintain Products Liability Insurance.

It Is tobe expresslyunderstood thatwe are assuming that the. coverageprovidedby the Products Liability Insurancepolicy Isnot presentlyprovided in any of the three Insurancepoliciesnow required. Under theprovisions of the statuteyou could not require dual coverage,as such regulationwould not be reasonablynecessary.

TheRailroad Commissionof Texasmay require licenseesunder theprovisions of Article 6053, V.C.S., toprocureand maintain an Insurancepolicy or surety bond which would Insure the licensee for any damages occurringafter Installationof butane equipment;which proximatelyresulted from an act ofnegligence committedby the licensee, its agents oremployees,while Installing such equipment.

Yours very truly, ATT0QJRYGRNRRALOFTl%XAS

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