An Act concerning boiler inspections and insurance and amending R.S.34:7-14.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. R.S.34:7-14 is amended to read as follows:

34:7-14. a. All steam or hot water boilers or similar equipment potentially capable of generating steam, except steam boilers having adequate relief devices set to discharge at a pressure not greater than 15 pounds per square inch, gage, or hot water boilers having adequate relief devices set to discharge at a pressure not greater than 160 pounds per square inch, gage, and which hot water boilers are reliably limited to temperatures not exceeding 250 degrees Fahrenheit, when such steam or hot water boilers serve dwellings of less than six-family units or other dwellings with accommodations for less than 25 persons, shall be inspected and be subject to a hydrostatic test, if necessary, at least once in each year, at 12-month intervals, by an inspector of the Division of [Workplace Standards] Public Safety and Occupational Safety and Health, excepting, however, such as may be insured after having been regularly inspected in accordance with the terms of this article by insurance companies, whose inspectors shall have satisfactorily passed an examination or received certificates of competency approved by the commissioner. Such inspection shall be as completely internal and external as construction permits, except that in the case of a steam or hot water boiler or similar equipment, the operation of which is an integral part of or necessary to a continuous processing operation, internal inspections may, at the discretion of the commissioner, be performed at intervals in excess of 12 months as permitted by the shutting down of the processing operation. The inspection of any equipment described in this chapter by a certified inspector of an insurance company shall be acceptable in lieu of State inspection. This article shall not apply to any boiler having less than 10 square feet of heating surface or a heat input of less than 10 kilowatts or 40,000 British Thermal Units per hour or to equipment under the jurisdiction and control of the United States Government, the inspection of which is actively regulated by a federal agency, or to equipment used solely for the propulsion of motor vehicles regulated by Title 39 of the Revised Statutes.

b. All other pressure vessels may be inspected and be subject to test after installation and periodically at such intervals as the commissioner may by rule establish. Inspection and test shall be performed by an inspector of the Division of Workplace Standards
excepting, however, such as may be insured after having been regularly inspected in accordance with the terms of this article, by insurance companies, whose inspectors shall have satisfactorily passed an examination or received certificates of competency approved by the commissioner, or such as may be regularly inspected by a certified user-inspector of a registered inspection agency approved by the commissioner. Such user-inspection shall have passed an examination or received a certificate of competency from the commissioner, and the inspection shall be conducted in such manner as the commissioner may by rule provide. The inspection of any equipment described in this subsection by a certified inspector of an insurance company or a certified user-inspector of a registered inspection agency shall be acceptable in lieu of State inspection where such inspections are recorded with the Division of [Workplace Standards] Public Safety and Occupational Safety and Health accompanied by fees in accordance with the following schedule; the fees established hereunder pursuant to the amendatory provisions of P.L.2003, c.117 shall be in effect for State fiscal years 2003-04 and 2004-05, after which such fees may be adjusted by the Commissioner of Labor and Workforce Development in accordance with fee schedules adopted by regulation: one to 25 vessels, $15.00 each; 26 to 100 vessels, $7.50 each; 101 to 500 vessels, $6.00 each; and over 500 vessels, $4.50 each. These fees are to be collected from the owner or user but payable by the inspection agency to the Department of Labor and Workforce Development.

This subsection shall not apply to any pressure vessels:

(1) Subject to internal or external pressure not exceeding 15 psig; or

(2) Having inside diameter not exceeding 6 inches; or

(3) Used for water storage purposes serving dwellings of less than six-family units or other dwellings with accommodations for less than 25 persons, when none of the following limitations is exceeded:

(a) 200 degrees Fahrenheit

(b) 120 gallons water containing capacity

(4) Under the jurisdiction and control of the United States Government, the inspection of which is actively regulated by a federal agency; or to equipment used solely for the propulsion of motor vehicles regulated by Title 39 of the Revised Statutes.

c. The furnishing of, or failure to furnish, insurance inspections or advisory services in connection with or incidental to the issuance or renewal of a boiler and machinery insurance policy shall not subject the insurer, whether domestic or foreign, its agents, employees, or service contractors, to liability for damages from injury, death, or loss occurring as a result of any act or omission in the course of those services. This subsection shall not apply in the event the gross negligence of the insurer, its agent, employee, or service contactor, created the condition that was the proximate cause of injury, death or loss.

(cf: P.L.2003, c.117, s.3)

2. This act shall take effect on the 60^th day after enactment.

STATEMENT

This bill provides that insurers shall not be liable for damages resulting from conducting insurance inspections, or failing to conduct inspections, as part of the issuance or renewal of a boiler and machinery insurance policy, except in situations in which the insurer's gross negligence is determined to have proximately caused the damages.