Today's Law As Amended


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AB-1158 Alcoholism or drug abuse recovery or treatment facilities: recovery residences: insurance coverage.(2021-2022)



As Amends the Law Today


SECTION 1.

 Section 11834.10 of the Health and Safety Code is amended to read:

11834.10.
 (a) A licensee shall not operate an alcoholism or drug abuse recovery or treatment facility beyond the conditions and limitations specified on the license.
(b) Licensed services offered or provided by a licensed alcoholism or drug abuse recovery or treatment facility, including, but not limited to, incidental medical services as defined in Section 11834.026, shall be specified on the license and provided exclusively:
(1) Within the licensed facility; or facility. 
(2) Within any facilities identified on a single license by street address.
(c) Only residents of the licensed alcoholism or drug abuse recovery or treatment facility shall receive licensed services.
(d) A licensee that serves more than six residents shall, at all times, maintain all of the following insurance coverages, which shall include as an additional insured any government entity with which the licensee has a contract:
(1) Commercial general liability insurance that includes coverage for premises liability, products and completed operations, contractual liability, personal injury and advertising liability, abuse, molestation, sexual actions, and assault and battery, with minimum coverage amounts for bodily injury or property damage of not less than one million dollars ($1,000,000) per occurrence.
(2) Commercial or business automobile liability insurance covering all owned vehicles, hired or leased vehicles, nonowned vehicles, and borrowed and permissive uses, with minimum coverage amounts for bodily injury or property damage of not less than one million dollars ($1,000,000) per occurrence.
(3) Workers’ compensation insurance, as required by law. Notwithstanding subdivision (b) of Section 3700 of the Labor Code, a certificate of self-insurance obtained pursuant to that subdivision does not satisfy this requirement.
(4) Employer’s liability insurance, with minimum coverage amounts for bodily injury or disease of not less than one hundred thousand dollars ($100,000) per occurrence.
(5) Professional liability and errors and omissions insurance that includes an endorsement for contractual liability, with minimum coverage amounts of one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) aggregate. If applicable, the contract shall include an endorsement for defense and indemnification of any government entity with which the licensee has contracted.
(e) A licensee that serves six or fewer residents shall, at all times, maintain general liability insurance coverage.
(f) (1) A licensee may meet the insurance requirements of this section by procuring coverage from an admitted insurer, or a nonadmitted insurer that is eligible to insure a home state insured under Chapter 6 (commencing with Section 1760) of Part 2 of Division 1 of the Insurance Code.
(2) Notwithstanding paragraph (1), the workers’ compensation insurance required by this section shall be obtained as required by Section 3700 of the Labor Code.
(d) (g)  The department may adopt regulations to implement this section in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(e) (h)  Notwithstanding the rulemaking provisions of the Administrative Procedure Act, the department may implement, interpret, or make specific this section by means of provider bulletins, written guidelines, or similar instructions.

SEC. 2.

 Section 11853.5 is added to the Health and Safety Code, to read:

11853.5.
 (a) Any government entity that contracts with a privately owned recovery residence to provide recovery services, or an alcoholism or drug abuse recovery or treatment facility to provide treatment services for more than six residents, shall require the contractor, at all times, to maintain all of the following insurance coverages, which shall include the government entity as an additional insured:
(1) Commercial general liability insurance that includes coverage for premises liability, products and completed operations, contractual liability, personal injury and advertising liability, abuse, molestation, sexual actions, and assault and battery, with minimum coverage amounts for bodily injury or property damage of not less than one million dollars ($1,000,000) per occurrence.
(2) Commercial or business automobile liability insurance covering all owned vehicles, hired or leased vehicles, nonowned vehicles, and borrowed and permissive uses, with minimum coverage amounts for bodily injury or property damage of not less than one million dollars ($1,000,000) per occurrence.
(3) Workers’ compensation insurance, as required by law. Notwithstanding subdivision (b) of Section 3700 of the Labor Code, a certificate of self-insurance obtained pursuant to that subdivision does not satisfy this requirement.
(4) Employer’s liability insurance, with minimum coverage amounts for bodily injury or disease of not less than one hundred thousand dollars ($100,000) per occurrence.
(5)  Professional liability and errors and omissions insurance that includes an endorsement for contractual liability, with minimum coverage amounts of one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) aggregate. The contract shall include an endorsement for defense and indemnification of the government entity with which the licensee has contracted.
(b) Any government entity that contracts with an alcoholism or drug abuse recovery or treatment facility to provide treatment services for six or fewer residents, shall require the contractor, at all times, to maintain general liability insurance coverages, which shall include the government entity as an additional insured.
(c) (1) A privately owned recovery residence that contracts with a government entity may meet the insurance requirements of this section by procuring coverage from an admitted insurer, or a nonadmitted insurer that is eligible to insure a home state insured under Chapter 6 (commencing with Section 1760) of Part 2 of Division 1 of the Insurance Code.
(2) Notwithstanding paragraph (1), the workers’ compensation insurance required by this section shall be obtained as required by Section 3700 of the Labor Code.
(d) This section does not prohibit a government entity from requiring quality and performance standards or levels of insurance coverage that are similar to, or that exceed, the standards and levels described in this section when contracting for recovery residence services.
(e) For the purposes of this section, the following terms have the following meanings:
(1) “Alcoholism or drug abuse recovery or treatment facility” has the same meaning as in Section 11834.02.
(2) “Government entity” means the state, a county, or a city.
(3) “Recovery residence” has the same meaning as in Section 11833.05.
(f) This section shall apply to contracts entered into, renewed, or amended on or after January 1, 2022.

SEC. 3.

 Section 10087 of the Insurance Code is amended to read:

10087.
 (a) (1)  As used in this chapter chapter,  “policy of residential property insurance” shall mean  means  a policy insuring individually owned residential structures of not more than four dwelling units, individually owned condominium units, or individually owned mobilehomes, and their contents, located in this state and used exclusively for residential purposes or a tenant’s policy insuring personal contents of a residential unit located in this state. “Policy of residential property insurance,” as defined, shall not include insurance for real property or its contents used for any commercial, industrial or business purpose, except a structure of not more than four dwelling units rented for individual residential purposes. A policy that does not include any of the perils insured against in a standard fire policy shall not be included in the definition of “policy of residential property insurance.” 
(2) “Policy of residential property insurance,” does not include any of the following:
(A) Insurance for real property or its contents used for any commercial, industrial, or business purpose, except a structure of not more than four dwelling units rented for individual residential purposes.
(B) A policy that does not include any of the perils insured against in a standard fire policy.
(C) A policy that provides, or is construed to provide, any coverage or indemnity for the payment of any fine, penalty, or restitution in any criminal, civil, or administrative action or proceeding, or any coverage or indemnity for the payment of any loss or liability, arising from the operation of either a recovery residence, as defined in Section 11833.05 of the Health and Safety Code, or an alcoholism or drug abuse recovery or treatment facility, as defined in Section 11834.02 of the Health and Safety Code. This subparagraph shall apply to policies issued, renewed, or amended on or after January 1, 2022.
(3) (A) Subparagraph (C) of paragraph (2) does not prohibit a recovery residence that is managed by its residents and operates on a not-for-profit basis from obtaining coverage under a policy of residential property insurance.
(B) For purposes of subparagraph (A), a recovery residence operates on a not-for-profit basis if it satisfies all of the following:
(i) It does not accept or require valuable consideration from or on behalf of residents other than a pro rata share of living expenses.
(ii) It is not owned by, or under contract with, an alcoholism or drug abuse recovery or treatment facility, as defined in Section 11834.02 of the Health and Safety Code.
(iii) It is not owned by, or under contract with, an affiliate, contractor, or intermediary of an alcoholism or drug abuse recovery or treatment facility, as defined in Section 11834.02 of the Health and Safety Code.
(b) Proof of mailing of any offer, disclosure, or document required to be delivered by this chapter by first-class mail addressed to a named insured or applicant at the mailing address shown on the policy or application shall create a conclusive presumption that the offer was made or that the disclosure or document was delivered as required. If an offer, disclosure, or document required to be delivered by this chapter is not mailed, but is hand delivered to the insured, the insured’s signed receipt creates a conclusive presumption that the offer was provided or that the disclosure or document was delivered as required.
(c) This section shall become operative on January 1, 2019.