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: The authority 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 t ion 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.' 

We felt 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 ,bond her&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, and not 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,ond which 

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 ins e allation of 

butane equipment frapa the 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 occur after the completion of Installation of butane equipment, which proximately result 

from an act of negligence ccmmitted by the licensee, 

Its agents or employees, while Installing the equipment. As you have the authority to promulgate such 

rules and regulations as shall be reasonably neoessary for the protection and safety of the public, It 

is our opinion that you have the authority to require 

licensees under the provisions of Article 6053 to procure and maintain Products Liability Insurance. 

It Is to be expressly understood that we 

are assuming that the. coverage provided by the Products Liability Insurance policy Is not presently provided in any of the three Insurance policies now required. Under the provisions of the statute you could 

not require dual coverage, as such regulation would 

not be reasonably necessary. 

The Railroad Commission of Texas may 

require licensees under the provisions of 

Article 6053, V.C.S., to procure and maintain an Insurance policy or surety bond 

which would Insure the licensee for any 

damages occurring after Installation of butane equipment; which proximately resulted 

from an act of negligence committed by the 

licensee, its agents or employees, while 

Installing such equipment. 

Yours very truly, 

ATT0QJRYGRNRRALOFTl%XAS 

DMGrlg