The National Federation of Independent Business State Director Leah Long said on April 1 that small business owners are calling on lawmakers to approve House Bill 526, a measure aimed at limiting rising insurance costs by capping certain lawsuit damages.
Supporters of the bill say it would help make legal outcomes more predictable and stabilize insurance rates for small employers. “Even one frivolous lawsuit can be devastating for a small business,” Long said. “The cost of defending or settling a claim can drive up insurance premiums or force a business to close its doors. House Bill 526 would bring more predictability to the legal system and help stabilize insurance rates for small employers.”
House Bill 526 is currently pending in the House Committee on Civil Law and Procedure. The legislation proposes setting a $500,000 cap on general damages in most injury lawsuits, regardless of how many parties are named in the case. In cases involving severe, permanent mental injury that limits an individual’s ability to work or live independently, the cap would increase to $1 million.
The proposed caps would not apply if the case involves severe physical injuries—such as loss of limb or major organ function—or if a court finds that the defendant acted intentionally or maliciously.
Long said current law allows unlimited general damages, which she believes contributes to higher insurance costs. “By setting reasonable limits, lawmakers can help attract more insurers to the market and bring down costs for small businesses,” she said.
The outcome of this legislation could have implications for both insurers and business owners as they seek ways to manage expenses related to liability claims.
