Completed Operations Legislation Passes
Protecting Builders And Homeowners

On March 29, 2007, Governor Pawlenty signed a small bill that will result in big changes for the residential construction industry.  Chapter 9, Senate File 1168 requires that residential contractors, as of August 1, must purchase general liability insurance with completed operations coverage. Representative Joe Atkins and Senator Dan Sparks authored the legislation.

“This is a win for both builders and consumers. In terms of consumer protection, it is one of the most significant changes that will have a positive and long term impact,” said Jim Gander, President of the Builders Association of Minnesota (BAM). “It further defines the insurance requirements for builders and prevents insurance companies from selling empty insurance policies.” 

In 2003, many standard market insurance companies insuring builders either left the state or substantially reduced coverage. The reduction of coverage was so severe that it led builders to buy insurance policies without any coverage once a home was sold. Unfortunately, after a home is sold is the critical time a builder needs to rely on a general liability policy.

With completed operations coverage required in all policies, builders and homeowners alike can be confident that the means to resolve a construction issue will be available should the need arise.

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