In a recent edition of the Home Builder Advocate, the Home Builders Association of Metro Denver included an article entitled, “What was accomplished by the passage of House Bill 1394? What does it mean to our industry?” In defense of the HBA’s support of the bill, the article states:

Since the signing of House Bill 1394 by Gov. Ritter, some members have heard from a few fellow construction professionals that they have experienced an increase in their general liability insurance rates. The Colorado Association of Home Builders (CAHB), believes that rates for some policies have in fact increased, but they also believe that for those construction professionals with appropriate general liability insurance coverage prior to the passage of HB-1394, there were no significant changes in their premiums or coverage.

To adequately explain why CAHB supported the measure and why it was so important to our industry, we have attached two documents provided to us by CAHB which will help answer any questions that you may have regarding the provisions of HB-1394 or if you feel like you have been adversely affected by the new law. The summary of the two documents, “Colorado Instructs Courts on How to Interpret Liability Policies Issued to Contractors,” and a legal opinion from the law firm of Sherman & Howard, are particularly important. We encourage you to read both documents (see attachments) for a clear explanation of what was accomplished by the passage of House Bill 1394.

One issue addressed that is of particular importance is making clear why the exit from Colorado of some insurance companies due to the passage of HB 1394 will increase consumer protection and provide construction professionals with the general liability insurance that they thought they had actually purchased – an improvement for both the industry and the consumer. The last paragraph in the Sherman & Howard document states “while certain insurers have announced intent to vacate the Colorado construction market as a result of the new law, we believe these insurers never intended to provide coverage for construction defect claims.” Many of the policies written with a “super Montrose” exclusion, were never intended to provide insurance protection but rather a certificate of coverage which would have failed to protect both its purchaser and the public at large.

Should you have any questions regarding this bill, please do not hesitate to contact Rob Nanfelt, Executive Vice Officer of CAHB at or at 303-691-2242. Or if you’d like perspective regarding CAHB’s own general liability insurance program, please contact Jon Lindstrom at 303-765-3635.

Most importantly, you should be aware that this legislation has saved several Colorado contractors from bankruptcy since, with its passage, the insurance companies that had issued policies to them are now involved in defending the companies and paying damages where appropriate.

To access the final version of the bill, go to

To obtain copies of any of the documents attached to this edition of the Home Builder Advocate, please contact David M. McLain by e-mail at or by phone at (303) 987-9813.



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