A report from the Nevada Independent revealed that Assembly Bill 398 (AB398) was amended through adopted regulations following an “outcry” from Nevada businesses who feared the law would “reduce the availability of liability insurance and increase costs for policies covering medical malpractice, construction defects and more.”

The report also reveals that Assembly Speaker Steve Yeager (D-Las Vegas) did not publicly disclose his personal, business, or financial relationship to Watkins and Battle Born Injury Lawyers as he voted for and pushed through a bill to help his own firm and their client. Of note, Yeager serves as vice chair of the Assembly Select Committee on Ethics.

Lawmakers adopted the regulations guiding AB398 on Thursday during a meeting of the Legislative Commission, just days before the law will take effect on Oct. 1. The updated regulations define liability insurance, specify the types of insurers and policies the bill applies to, and clarify how insurers should make legal defense costs available in liability insurance policies.

The new law forbids insurance companies from using the cost of defense, legal costs or fees to limit liability insurance coverage. The practice of subtracting legal defense costs from the liability limit is known as a “Defense Inside the Limits” policy, whereby the amounts paid by an insurance company to defend the insured party in a lawsuit will decrease the policy limit amount.

The bill was originally presented by Justin Watkins, a former lawmaker and attorney who now lobbies on behalf of the Nevada Justice Association, a statewide trade organization for trial lawyers. Watkins is also a managing partner at Battle Born Injury Lawyers, where Assembly Speaker Steve Yeager is also a partner. 

During an April 10 hearing on AB 398 with Watkins, Yeager asked two questions but did not disclose his relationship to Watkins (starting at the 7:02 minute mark of the link).

Although Yeager recently addressed the numerous ethical scandals that have embroiled many of his Democratic colleagues, we have reached out to him for clarification and comment on this latest development. We will update the story with Yeager’s remarks if received.