OBTAINING GENERAL LIABILITY INSURANCE is rapidly moving to the forefront of builders' concerns. NAHB president Bobby Rayburn recently announced a partnership with a global risk management consulting firm “to create a comprehensive profile of the home building industry's risk management needs." The information will be used to create new general liability packages for home builders to present to insurance agencies.

But in some areas with a critical lack of insurance, builders have aggressively pushed for dramatic new legislation.

For example, the Louisiana HBA (LHBA) lobbied hard in recent months to change the state's home warranty period, and its efforts paid off. In May, Gov. Kathleen B. Blanco signed the state's New Home Warranty Act (House Bill 401). This bill reduces the required coverage of major structural defects from seven years to five years.

While that may not sound like a significant reduction, builders hope it's enough to lure general liability insurers back to the Louisiana. Without them, they can't do business. In the state of Washington, for example, condominium builders recently testified before the State Judiciary Committee, reminding them that during a similar insurance crisis in the 1990s, the construction of condominiums fell by 84 percent at a time when the market for new homes was booming.

Michelle Shirley, legislative affairs officer for the LHBA, says the new warranty law should “encourage insurers to return to our market and make general liability insurance more readily available and affordable for our members.”