S-1333               _______________________________________________

                                                   SENATE BILL NO. 5654

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By Senators Lee and Matson

Read first time 2/1/89 and referred to Committee on   Financial Institutions & Insurance.

AN ACT Relating to insurance coverage; and adding a new section to chapter 19.72 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.  A new section is added to chapter 19.72 RCW to read as follows:

          (1) A bond shall not provide any other type of insurance coverage defined in chapter 48.11 RCW, including but not limited to general casualty insurance coverage as defined in RCW 48.11.070, and property insurance coverage as defined in RCW 48.11.040.  Language in any contract or bond to the contrary shall be void.  Bond shall mean any form of surety insurance as defined in RCW 48.11.080.

          (2) Unless otherwise specifically provided by statute, no bond shall be liable for damages based upon or arising out of any:

          (a) Tortious injury to:

          (i) Person (including death); or

          (ii) Real or personal property except as provided in subsection (3) of this section; or

          (b) Failure to have any or adequate insurance coverage,

!ixeven if liability is imposed on the surety's principal or the surety by contract, bond, or common law.

          (3) To the extent that its principal is held liable and the bond so provides, a surety may be held liable for damage or damages to real or personal property which is part of the principal's work product, where such damages result directly from the principal's improper work.  Work product means the labor of and materials supplied or installed by the principal.