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- 83rd Session (2025)
Assembly Bill No. 512–Committee
on Commerce and Labor
CHAPTER..........
AN ACT relating to insurance; establishing the policies of insurance
to which certain requirements relating to coverage for legal
defense costs are applicable; including certain insurance that
provides for certain payments for certain legal services and
certain expenses in the definition of “casualty insurance”; and
providing other matters properly relating thereto.
Legislative Counsel’s Digest:
Existing law prohibits an insurer from issuing or renewing a policy of liability
insurance that contains a provision that: (1) reduces the lim it of liability stated in
the policy by the costs of defense, legal costs and fees and other expenses for
claims; or (2) otherwise limits the availability of coverage for the costs of defense,
legal costs and fees and other expenses for claims. (NRS 679A.2 10) Existing
regulations provide that these prohibitions apply to a policy of casualty insurance
that: (1) provides insurance against legal liability arising from the ownership or
operation of a motor vehicle; (2) provides insurance against legal liability arising
from the ownership of housing occupied by the owner of the housing; (3) is a
policy of commercial general liability insurance; (4) is a policy of commercial
automobile insurance; or (5) provides insurance covering the professional liability
of cer tain providers of health care. Existing regulations also exempt from the
applicability of the prohibitions: (1) a risk retention group; (2) captive insurance
that does not cover third -party liability; and (3) a nonadmitted insurer. (Sections 2
and 3 of Adopted Reg. of Comm’r of Insurance, LCB File No. R029 -23) Section 1
of this bill codifies those provisions of existing regulations into statute.
Existing law provides for the regulation of insurance and insurers in this State
by the Commissioner of Insuranc e. (Title 57 of NRS) Existing law establishes
various kinds of insurance and prohibits the Commissioner from authorizing an
insurer to transact in this State any kind of insurance other than the kinds of
insurance established under existing law. (NRS 680A. 080, 681A.010 -681A.080)
Among the various kinds of insurance established under existing law is casualty
insurance, which existing law defines to include vehicle insurance, liability
insurance, workers’ compensation and employer’s liability insurance and va rious
other particular types of casualty insurance. (NRS 681A.020) Section 2 of this bill
expands the definition of casualty insurance to include legal expenses insurance,
which, under section 2, means insurance against any liability of a person or entity
for the costs of any specific legal services or specific legal expenses and which
pays or reimburses the person for the costs of the services or expenses. Section 2
excludes certain arrangements for prepaid legal services from the definition of legal
expenses insurance. As such, under section 2, legal expenses insurance is included
among the various types of insurance that a casualty insurer may be authorized to
transact and subject to any applicable provision of existing law governing ca sualty
insurance.
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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. NRS 679A.210 is hereby amended to read as
follows:
679A.210 1. Notwithstanding any other provision of law, an
insurer, including, without limitation, an insurer listed in NRS
679A.160, shall not issue or renew a policy of liability insurance
that contains a provision that:
[1.] (a) Reduces the limit of liability stated in the policy by the
costs of defense, legal costs and fees and other expenses for claims;
or
[2.] (b) Otherwise limits the availability of coverage for the
costs of defense, legal costs and fees and other expenses for claims.
2. The provisions of this section do not apply to:
(a) A risk retention group, as defined in NRS 695E.110.
(b) Captive insurance that does not cover third-party liability.
(c) A nonadmitted insurer, as defined in NRS 685A.0375.
3. As used in this section, “policy of lia bility insurance”
includes only a policy of casualty insurance that:
(a) Provides insurance against legal liability arising from the
ownership or operation of a motor vehicle, as defined in
NRS 485.050;
(b) Provides insurance against legal liability ari sing from the
ownership of housing that is occupied by the owner as the primary
residence of the owner;
(c) Is a policy of commercial general liability insurance;
(d) Is a policy of commercial automobile insurance; or
(e) Provides insurance covering the professional liability of a
provider of health care, as defined in NRS 41A.017.
Sec. 2. NRS 681A.020 is hereby amended to read as follows:
681A.020 1. “Casualty insurance” includes:
(a) Vehicle insurance. Insurance against loss of or damage to
any land vehicle or aircraft or any draft or riding animal or to
property while contained therein or thereon or being loaded or
unloaded therein or therefrom, from any hazard or cause, and
against any loss, liability or expense resulting from or incidental to
ownership, maintenance or use of any such vehicle, aircraft or
animal, together with insurance against accidental injury to natural
persons, irrespective of legal liability of the insured, including the
named insured, while in, entering, alighting from, ad justing,
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repairing, cranking, or caused by being struck by a vehicle, aircraft
or draft or riding animal, if such insurance is issued as an incidental
part of insurance on the vehicle, aircraft or draft or riding animal.
(b) Liability insurance. Insurance against legal liability for the
death, injury or disability of any human being, or for damage to
property, including liability resulting from negligence in rendering
expert, fiduciary or professional services, and provisions of medical,
hospital, surgical, disability benefits to injured persons and funeral
and death benefits to dependents, beneficiaries or personal
representatives of persons killed, irrespective of legal liability of the
insured, when issued as an incidental coverage with or supplemental
to liability insurance.
(c) Workers’ compensation and employer’s liability. Insurance
of the obligations accepted by, imposed upon or assumed by
employers under law for death, disablement or injury of employees.
(d) Burglary and theft. Insurance against l oss or damage by
burglary, theft, larceny, robbery, forgery, fraud, vandalism,
malicious mischief, confiscation, or wrongful conversion, disposal
or concealment, or from any attempt at any of the foregoing,
including supplemental coverage for medical, hosp ital, surgical and
funeral expense incurred by the named insured or any other person
as a result of bodily injury during the commission of a burglary,
robbery or theft by another, and, also, insurance against loss of or
damage to moneys, coins, bullion, se curities, notes, drafts,
acceptances or any other valuable papers and documents, resulting
from any cause.
(e) Personal property floater. Insurance upon personal effects
against loss or damage from any cause.
(f) Glass. Insurance against loss or damage to glass, including its
lettering, ornamentation and fittings.
(g) Boiler and machinery. Insurance against any liability and
loss or damage to property or interest resulting from accidents to or
explosions of boilers, pipes, pressure containers, machinery or
apparatus, and to make inspection of and issue certificates of
inspection upon boilers, machinery and apparatus of any kind,
whether or not insured.
(h) Leakage and fire extinguishing equipment. Insurance against
loss or damage to any property or interest caused by the breakage or
leakage of sprinklers, hoses, pumps and other fire -extinguishing
equipment or apparatus, water pipes or containers, or by water
entering through leaks or openings in buildings, and insurance
against loss or damage to such spri nklers, hoses, pumps and other
fire-extinguishing equipment or apparatus.
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(i) Credit and mortgage guaranty. Insurance against loss or
damage resulting from failure of debtors to pay their obligations to
the insured, and insurance of real property mortgage lenders against
loss by reason of nonpayment of the mortgage indebtedness.
(j) Elevator. Insurance against loss of or damage to any property
of the insured, resulting from the ownership, maintenance or use of
elevators, except loss or damage by fire, and to make inspection of
and issue certificates of inspection upon, elevators.
(k) Congenital defects. Insurance against congenital defects in
human beings.
(l) Livestock. Insurance against loss or damage to livestock, and
services of a veterinary for such animals.
(m) Entertainments. Insurance indemnifying the producer of any
motion picture, television, radio, theatrical, sport, spectacle,
entertainment, or similar production, event or exhibition against loss
from interruption, postponement or cancellatio n thereof due to
death, accidental injury or sickness of performers, participants,
directors or other principals.
(n) Legal expenses. Insurance against any liability of a person
or entity for the costs of any specific legal services or specific legal
expenses and which pays or reimburses the person or entity for the
costs of such services or expenses. Legal expenses insurance does
not include an arrangement through which:
(1) A member of an organization prepays for specific legal
services;
(2) The org anization of which the person is a member
contracts directly with attorneys for the provision of the specific
legal services and makes the specific legal services available to the
members of the organization or the dependents of the members;
and
(3) The organization pays the attorneys with whom the
organization has contracted fixed, prearranged payments and
the attorneys receive no additional payment or reimbursement for
the specific legal services.
(o) Miscellaneous. Insurance against any other kind of loss,
damage or liability properly a subject of insurance and not within
any other kind of insurance as defined in this chapter, if such
insurance is not disapproved by the Commissioner as being contrary
to law or public policy, including insurance for ho me protection
issued pursuant to NRS 690B.100 to 690B.180, inclusive.
2. Provision of medical, hospital, surgical and funeral benefits,
and of coverage against accidental death or injury, as incidental to
and part of other insurance as stated under parag raphs (a) (vehicle),
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(b) (liability), (d) (burglary), (g) (boiler and machinery) and (j)
(elevator) of subsection 1 shall for all purposes be deemed to be the
same kind of insurance to which it is so incidental, and is not subject
to provisions of this Code applicable to life and health insurances.
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