                  THEA~TORNEYGENERAL
                              OFTEXAS
                              AUWTINH.%-EXAE
PRICE  DANIEL
ATTORNEYGENERAL


                                  April   28,   1,949


       Mr. S. C. MoIntosh, Director
       Gas Utilities   Divlsi~
       Railroad Commission of Texas
       Austin, 'l!sxas
                            Opinion No. V-817
                            Be:    The authority    of the,Rall-,
                                   road Commlssion'to requlrb
                                   that installers    of butane
                                   squipmont carry product8
                                   liability   insurance.
       Dear Mr. McIntosh:
                     Your letter requesting  the opinion of the At-
       torney     General on the above question reads as follows:
                   AI would like to call       .OW$rttentlon    to
             the second paragraph of,,Sect ion 11, Article
             6053, as amended, V.A.C’iS.,      which prescribes
             the'Lnsurance.that    the'lloefisee,   ynder the
             Kct, muat obtain.     It ha6 bbep. tile policy     0r
             this Division   in the paet'to~requlrb       the li-
             censei3 to carry tlprse separate polioles;
             namely:   llbrkmefi~s Compensatlon,,Manufactur-
             errs land Ccmt+actorts    Publla Liability      Andy
             Automobile Bodily Injury and Property Damage.'
             We felt that these-three       types of .policies
             qere necessary    in order to protect     the am-
             ployees of the licensee      and the public et
             large under the ab6ve, mentioned SsQtion of
             the above mentioned Article.
                      "It will be.grsatly   appreolated    by me iS
              yffur office    would rsndor 8n opinion as to
              whether or not we a+e in a position         to flurther
              require    Products Liability   Insurance under the
              above mentioned Section and.Artlcle.,         Products
              Liability    Insurance would insure the licensee
              for any acoident that might occur due to iaul-
              ty installation      of butane equipment fram the
              time the equipment is installed        through the
              life of the policy."
Mr. S. C. McIntosh,       Page 2      (V-817)


              Seotion   11, Article   6053, V.C.3:   reads,   ln part,
as follows2
            “In addition to the ,bond her&n required,
     such licensee     shall be obligated    to procure
     frcm some reliable      insurance or surety cqupany
     qualified   to do business in the State of Texas,
     end keep same in forae 80 long as they shall
     continue in business,      a policy   of lnsuranoe or
     surety bond which shall guarantee the payment
     of all damages which proximately result from
     any act of negligence,       while engaglng,in    any
     of the activities      as herein provided,    on the
     part of said licensee,       their agents and em-
     ployees,   to both the employees of said licensee
     and also to the publio generally        ,said policy
     or bond to be in the. s= of not less than Ten
     Thousand ($10,000.00)      Dollars for perscoal      ln-
     jury for any one acoident,        and not less than
     Five Thousand ($5,000&O) Dollars for property
     damage for any one accident.         Provided that
     this seotion shall not be applloablo         unless
     and until suoh bonds or pofloiesr of iaauranoe
     are  available    for purohase end further pro-
     vided that such bonds or policies         of insurance
     shall be approved by the Railroad Conanlssion
     of Texas.”
           Section 6 of Article   6053 provides that the
Railroad Commission shall have “full power and authority
to adopt and promulgate such rules and regulations    as
shall be reasonably necessary to carry out the purpose
of  this Act and for the proteotion,   help, welfare and
safe $ of the public and persons using such materials.
. . .
           It is noted that all lioensees      under the pro-
visions of.,Artiole   6053 are obligated     to procure and
maintaln a polioy of lnsuranoe or a surety b,ond which
shall guarantee the payment of all damagrs to both the
employees of the licensee    and also to the pub110 gen-
erally which proximately result from any aot of negli-
gence on the part of said licensee,      their agents and
employees, while engaging in any of the aativlties       pro-
vided in the 8tatute.    You  state  that  the  Products Ma-
bility  Insurance would insure the lloense       for any ac-
cident that might oacur due to faulty ins e allation     of
butane equipment frapa the ttie the equipment is in-
stalled  through the life of the policy.
Mr. S. C. McIntosh, Page 3     (V-817)


          It Is evident that damages to the public
generally could occur after the completion of Instal-
lation of butane equipment, which proximately result
from an act of negligence ccmmitted by the licensee,
Its agents or employees, while Installing the equip-
ment. As you have the authority to promulgate such
rules and regulations as shall be reasonably neoes-
sary for the protection and safety of the public, It
is our opinion that you have the authority to require
licensees under the provisions of Article 6053 to pro-
cure and maintain Products Liability Insurance.
          It Is to be expressly understood that we
are assuming that the.coverage provided by the Prod-
ucts Liability Insurance policy Is not presently pro-
vided in any of the three Insurance policies now re-
quired. Under the provisions of the statute you could
not require dual coverage, as such regulation would
not be reasonably necessary.



          The Railroad Commission of Texas may
     require licensees under the provisions of
     Article 6053, V.C.S., to procure and main-
     tain an Insurance policy or surety bond
     which would Insure the licensee for any
     damages occurring after Installation of bu-
     tane equipment; which proximately resulted
     from an act of negligence committed by the
     licensee, its agents or employees, while
     Installing such equipment.

                             Yours very truly,
                        ATT0QJRYGRNRRALOFTl%XAS




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