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
DMGrlg