2023 Hawaii Revised Statutes › Title 24. Insurance › 431. Insurance Code › 431:1-217 Insurance policies issued to construction professionals.

§431:1-217 Insurance policies issued to construction professionals.
(a) For purposes of a liability insurance policy that covers occurrences of damage or injury during the policy period and that insures a construction professional for liability arising from construction-related work, the meaning of the term "occurrence" shall be construed in accordance with the law as it existed at the time that the insurance policy was issued.
(b) Notwithstanding any other provision to the contrary, this section shall apply to surplus lines insurance as defined by section 431:8-102.
(c) Any provision of an insurance policy issued in violation of this section shall be void and unenforceable as against public policy.
(d) This section shall apply to all liability insurance policies issued and in effect as of [June 3, 2011].
(e) For purposes of this section:
"Construction professional" means a person, sole proprietorship, partnership, corporation, limited liability corporation, or other entity that engages in an activity intended to assist in the development, construction, or repair of an improvement to real property, including a contractor licensed pursuant to chapter 444, a building owner, or a developer of a project regardless of whether the person or entity maintains a professional license.
"Liability insurance policy" means a contract of insurance including an owner-controlled, contractor-controlled, or other similar pooled insurance program that covers occurrences of damage or injury during the policy period and that insures a construction professional for liability arising from construction-related work. [L 2011, c 83, §2]
Case Notes
Subsection (a) required that commercial general liability umbrella policies in question, issued by plaintiff insurers in 2007, be interpreted under the law as it existed in 2007; even if this statute ostensibly nullified the Hawaii intermediate court of appeals' decision in Group Builders by "restoring" pre-Group Builders law, the statute did not purport to nullify any decision preceding Group Builders; thus, the policies in issue continued to fall under the Ninth Circuit's 2004 analysis in Burlington. 870 F. Supp. 2d 1015 (2012).
Pursuant to subsection (a), the court could not construe the meaning of the term "occurrence" based on the holding in Group Builders because the case was decided on May 19, 2010, and was not in existence when plaintiff issued the general liability insurance policies, the most recent of which took effect on January 18, 2010. The operative case law was that which existed at the time plaintiff issued the first policy, which took effect on November 11, 2002. 891 F. Supp. 2d 1179 (2012).
Commercial general liability (CGL) insurer did not breach covenant of good faith and fair dealing when it denied additional insured's tender of the underlying claim based on "other insurance" provision in primary insurer's policy. CGL insurer's denial of tender was grounded in both governing law and a reasonable interpretation of the policies at issue. 190 F. Supp. 3d 1003 (2016).
Court found that the underlying plaintiffs' claims for negligence, breach of contract, breach of express warranty, and breach of implied warranties, which arose from installation of a defective heating, ventilation, and air conditioning system that caused mold damage and ceiling damage in a veterinary clinic, were contract-based claims that did not constitute an "occurrence" within the coverage of commercial general liability (CGL) under Hawaii law in effect at time the policy was issued and, therefore, not covered by insurance company's CGL policies. 190 F. Supp. 3d 1003 (2016).
Where the court found that none of the claims in the underlying complaint arose from a covered "occurrence", the court also found, as a matter of law, that the products-completed operations hazard provisions in the commercial general liability policy did not cover the alleged damages. 190 F. Supp. 3d 1003 (2016).
Cited: 955 F. Supp. 2d 1121 (2013).
Mentioned: 829 F. Supp. 2d 914 (2011).