The Impact of IL SB 2481 – Court of Claims Award Limits
Illinois Senate Bill 2481 increases the maximum judgment by the Court of Claims from $100,000 to $2,000,000 retroactively back to cases filed on or after July 1, 2015. The limitation will adjust annually based on the Consumer Price Index for all urban consumers from the previous year, as determined by the U.S. Department of Labor.
The impact on contractors doing business with the State of Illinois will increase their liability exposure. The State of Illinois currently transfers their liability to the contractor as additional insured on the contractor’s general liability policy. State of Illinois’ current risk transfer requirements are fairly basic and only require a contractor to provide additional insured coverage for the contractor’s contributory negligence, due to the State’s current limited liability of $100,000.
If the State’s limited liability is increased from $100,000 to $2,000,000, they would need to revisit their current risk transfer protocols and may need to adopt a risk transfer program similar to an owner that has no limited liability or immunity. The State would incur higher administration costs to make sure their contractors were compliant. They would incur higher costs due to the learning curve involved with a new risk transfer program and due to their contractor’s higher insurance premiums caused by the additional liability that the contractors will be taking on.
The impact on the State DBE contractors may be more significant because of the tougher contract language. It’s very specific and requires additional insured endorsements, higher limits and zero flexibility to accommodate a non-compliant DBE. IL SB 2481 increases the cost of doing business in Illinois and those costs will be transferred to the Illinois taxpayer.
If you still have questions on how this could impact your construction company, our ‘A’ Team is here to help.
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