Rhode Island House Bill H7723

Rhode Island 2026 Regular Session

• Introduced: 2/12/26
• Refer: 2/12/26

Caption

Requires that insurance policies for property damage, personal injuries, and indemnification other than payment of compensation for workers compensation, state policy limits and no amount of the policy may be used to pay costs to defend a claim.

Impact

The proposed changes in HB 7723 have significant implications for liability insurance policyholders and insurers. By ensuring that defense costs are not deducted from the policy limits, the bill aims to provide greater certainty and fairness to policyholders. This amendment would mean that in the event of a claim, insured parties can be assured that a specified amount will be available for indemnification without having to account for the costs of defending against the claim. This could positively affect the perceived value and appeal of liability insurance contracts for businesses and individuals alike.

Summary

House Bill 7723 pertains to liability insurance requirements in the state of Rhode Island. It aims to amend the existing liability insurance regulations by instituting specific requirements for how policies manage their limits. Under this bill, every liability insurance policy covering property damage or personal injuries must clearly state policy limits that are fully available for claims. Most notably, the bill prohibits any portion of the policy limit from being allocated for the payment of fees or costs associated with defending claims, thereby ensuring that the entirety of the policy limit is earmarked for direct compensation to claimants.

Contention

Discussions surrounding House Bill 7723 may involve contention regarding the financial implications for insurance companies. Insurers might argue that the requirement to keep policy limits fully available for claims could lead to increased premiums, as they would need to adjust their pricing models to accommodate these new rules. Additionally, the bill could foster debate on the balance between protecting consumer interests and maintaining a sustainable insurance market, as changes in policy structures could impact how insurance products are marketed and distributed within the state.