Liability & Insurance

Template 10

Use Template 10 for:

Environmental Contractors

    Examples: Contractors who remove, handle, treat, store or transport hazardous materials

    Mandatory Contractual Language

    Insurance requirements should be saved and attached to the contract as an exhibit. To ensure the requirements are included as part of your contract, please include the following language within the insurance section of the agreement:

    _______ is required to maintain the insurance specified in Exhibit _____, which is attached hereto and incorporated herein by this reference.

    Consistent Language

    Edit the template to keep the language consistent with your agreement.

    For example: if the template refers to: “Consultant”, but the agreement uses “Contractor”, change all references in the template to “Contractor”. If your agency is not the County (SCAPOSD, Water Agency, Fairgrounds, etc.) substitute the correct terminology for all references to “County”. If the agreement is called “contract”, “license”, “lease”, etc., edit the template to match.

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    Template Assistant

    Contractor shall maintain and require all of its subcontractors and other agents to maintain the insurance listed below unless such insurance has been expressly waived by the attachment of a Waiver of Insurance Requirements. Contractor shall not commence Work, nor allow its employees, subcontractors or anyone to commence Work until the required insurance has been submitted and approved by County and a Notice to Proceed has been issued. Any requirement for insurance to be maintained after completion of the Work shall survive this Agreement.

    County reserves the right to review any and all of the required insurance policies and/or endorsements, but has no obligation to do so. Failure to demand evidence of full compliance with the insurance requirements set forth in this Agreement or failure to identify any insurance deficiency shall not relieve Contractor from, nor be construed or deemed a waiver of, its obligation to maintain the required insurance at all times during the performance of this Agreement.

    The named insured must match the name of the entity with whom we are contracting. Some policies have several named insureds, but all insureds may not show on the certificate. If there’s no match on the certificate, request a copy of the endorsement showing the full named insured, including the entity with whom we are contracting.

    Be sure the name on the agreement is the full legal name of the entity with whom we are contracting and not just a "dba" (doing business as), which is only a fictitious name.

    1. Workers Compensation and Employers Liability Insurance
      1. Workers Compensation insurance with statutory limits as required by the Labor Code of the State of California.
      2. Under California’s Labor code, if the party with whom we are contracting is a privately held corporation whose only employees are its sole shareholders, workers compensation insurance is not required. Similarly, if the party with whom we are contracting is a partnership or limited liability company with no employees other than its general partners or managers, workers compensation insurance is not required. A waiver is not needed.

      3. Employers Liability with minimum limits of $1,000,000 per Accident; $1,000,000 Disease per employee; $1,000,000 Disease per policy.
      4. The policy shall be endorsed to include a written waiver of the insurer’s right to subrogate against County.

        If a contractor’s employee is injured on the job, the workers compensation insurer will cover the claim. However, if the County is in any way responsible for causing that injury, the insurer will try to recover all or part of its payment from us. This is called subrogation. The insurer cannot recover from us if it has waived its right to subrogate.

      5. Required Evidence of Insurance:
        1. Subrogation waiver endorsement; and
        2. Certificate of Insurance
    2. General Liability Insurance
      1. Commercial General Liability Insurance on a standard occurrence form, no less broad than Insurance Services Office (ISO) form CG 00 01.

        ISO (Insurance Services Office) publishes a standard CGL. Some insurers use that specific form; others use their own form with a different numbering system. Any CGL is acceptable as long as the coverage is as broad as the ISO form.

        An occurrence policy responds if the injury or damage takes place during the policy period. It doesn’t matter when the claim is filed.

        A claims-made policy responds if the claim (demand for money) is made during the policy period.

      2. Minimum Limits: $2,000,000 per Occurrence; $4,000,000 General Aggregate; $4,000,000 Products/Completed Operations Aggregate. The General Aggregate shall apply separately to each Project. The required limits may be provided by a combination of General Liability Insurance and Commercial Excess or Commercial Umbrella Liability Insurance. If Contractor maintains higher limits than the specified minimum limits, County requires and shall be entitled to coverage for the higher limits maintained by Contractor.

        A Commercial Umbrella or Excess Liability policy provides additional limits which are usually shown on the Certificate of Insurance. The additional limits are added to the General Liability Limits. The combined total of the Excess or General Liability Limits and the Umbrella Limits must equal or exceed our minimum requirements.

        Occurrence limit: the most the insurer will pay for any one accident.

        General Aggregate: the most the insurer will pay for all claims resulting from damage or injuries that occur before the work is completed, regardless of the number of accidents, injuries, claims or claimants.

        Products/Completed Operations Aggregate: the most the insurer will pay for all claims resulting from damage or injuries that occur after the work is completed, regardless of the number of accidents, injuries, claims or claimants.

        When the General Aggregate applies separately to each project, your project does not share the limit with other projects the contractor does during the policy year. A separate Products/Completed Operations Aggregate is not required for each project because that coverage is not available.

        Department Waiver: You may waive the requirement for a separate per project General Aggregate if the General Aggregate is at least double the Occurrence limit.

      3. Any deductible or self-insured retention shall be shown on the Certificate of Insurance. If the deductible or self-insured retention exceeds $25,000 it must be approved in advance by County. Contractor is responsible for any deductible or self-insured retention and shall fund it upon County’s written request, regardless of whether Contractor has a claim against the insurance or is named as a party in any action involving the County.

        Contact Risk Management (Outlook: 139 kB) if the retention or deductible exceeds $25,000.

        We want to verify that the party with whom we are contracting has sufficient assets to fund a large retention or deductible. A waiver is not needed.

        There is no specific field on the Certificate of Insurance for a General Liability deductible or retention.

      4. Insurance shall be continued for one (1) year after completion of the Work

        Because injury or damage resulting from the contractor’s work can occur after the project is complete, the insurance must continue after the work is done. Occurrence policies must be in force when the injury or damage happens, not when the faulty work is done.

      5. [insert exact name of additional insured] shall be endorsed as additional insureds for liability arising out of ongoing and completed operations by or on behalf of the Contractor in the performance of this Agreement. County, et al. shall continue to be additional insureds for completed operations for (1) year after completion of the Work under this Agreement.

        Ongoing operations refers to injuries and damage that happen while the work is in progress.

        Completed operations refers to injuries and damage that happen after the work is complete. County needs to be an additional insured for both exposures. Most insurers issue two separate endorsements; a few issue their own form which includes both in the same endorsement.

        If the endorsement refers to "your work" and does not exclude completed operations, it is acceptable because "your work" includes both ongoing and completed operations. If you’re not sure, attach the questionable endorsement to a HelpRequest (Outlook: 139 kB) and submit it for review.

        You cannot receive evidence that coverage will be continued after the work is complete because policies are issued for only one year. When reviewing the insurance prior to the start of work, you can verify only that the insurance is currently in force.

        We must get a copy of the endorsement or section of the policy that makes us an additional insured. A statement on the Certificate of Insurance is not sufficient because an insurance company is bound by its policy and endorsements, not by the Certificate.

        Additional insured endorsements which do not include our name are acceptable if they have language granting additional insured status to parties for whom our vendor (or consultant, contractor, permittee, licensee, tenant, etc.) is required to provide additional insured status under a contract or agreement. Submit a HelpRequest (Outlook: 139 kB) if you’re not sure the endorsement is acceptable.

      6. The insurance provided to the additional insureds shall be primary to, and non-contributory with, any insurance or self-insurance program maintained by them.

        Because the County is an additional insured on the contractor’s policy, we want that policy to cover claims before any contribution from County’s CSAC protection or its self-insured retention.

        We must get a copy of the endorsement or section of the policy that has the Primary & Non-Contributory language.

        A statement on the Certificate of Insurance is not sufficient because an insurance company is bound by its policy and endorsements, not by the Certificate.

      7. The policy definition of "insured contract" shall include assumptions of liability arising out of both ongoing operations and the products-completed operations hazard (broad form contractual liability coverage including the "f" definition of insured contract in ISO form CG 00 01, or equivalent).

        This is included in standard General Liability policies and you do not need evidence of coverage.

      8. The policy shall be endorsed to include a written waiver of the insurer’s right to subrogate against County.

        If the contractor’s insurer pays a claim to a third party and the County is partially responsible for the injury or damage, the insurer will seek reimbursement from the County. This is called subrogation. The insurer cannot recover from us if it has waived its right to subrogate.

      9. The policy shall cover inter-insured suits between the additional insureds and include a "separation of insureds" or "severability" clause which treats each insured separately.

        This guarantees that the County will be covered if it is sued by the contractor and that the contractor will be covered if it is sued by the County. This language is standard in the General Liability policy; you do not need to get a specific endorsement to satisfy this requirement.

      10. Required Evidence of Insurance:
        1. Copy of the additional insured endorsement or policy language granting additional insured status;
        2. Copy of the endorsement or policy language indicating that Insurance is primary and non-contributory; and
        3. Certificate of Insurance
    3. Automobile Liability Insurance
      1. Minimum Limit: $2,000,000 combined single limit per accident.
      2. The required limit may be provided by a combination of Automobile Liability Insurance and Commercial Excess or Umbrella Liability Insurance.
      3. A Commercial Umbrella or Excess Liability policy provides additional limits which are usually shown on the Certificate of Insurance. The additional limits are added to the Auto Liability Limits. The combined total of the Auto Liability Limits and the Excess or Umbrella Limits must equal or exceed our minimum requirements.

      4. Insurance shall cover all owned, hired and non-owned vehicles.
      5. Hired Autos: vehicles the contractor rents or borrows.

        Non-owned Autos: vehicles owned by the contractor’s employees and subcontractors.

        If "Any Auto" is checked on the Certificate of Insurance, it includes owned, hired and non-owned autos.

      6. The policy shall include an MCS 90 endorsement if required by the Motor Carrier Act of 1980.

        The Motor Carrier Act of 1980 requires those who transport hazardous materials to have high limits of liability and to meet other insurance requirements. The requirements are satisfied when the Commercial Auto or Truckers Liability policy includes an MCS 90 endorsement. Under this endorsement the insurer guarantees that all obligations under the Motor Carrier Act of 1980 will be met, regardless of any policy limitations or exclusions.

      7. The policy shall include a Pollution Liability endorsement (ISO form CA 99 48 or equivalent).

        A standard Commercial Auto or Truckers policy excludes pollution claims resulting from the discharge or release of pollutants being transported by the covered vehicle. The pollution liability endorsement injury or damage removes this exclusion.

      8. The County of Sonoma, its officers, agents and employees shall be defined as insureds under the policy or shall be endorsed as additional insureds.

        When a contractor is doing work for the County, we are legally responsible for its actions. In most Business Auto policies the definition of "insured" automatically includes organizations that are legally responsible for insured’s actions.

        Any of the following is acceptable evidence that we are insureds on the contractor’s auto policy:

        1. "Designated Insured" endorsement which states that the County is covered because of the policy definition of "who is an insured";
        2. Copy of the definition of "insured" from the policy; or
        3. Additional Insured endorsement.
      9. Required Evidence of Insurance:
        1. Copy of the endorsement or policy language indicating that County is an insured;
        2. Copy of the MCS-90 endorsement if required;
        3. Copy of pollution liability endorsement; and
        4. Certificate of Insurance
    4. Contractors Pollution Liability
      1. Minimum Limits: $2,000,000 per pollution Incident; $4,000,000 Aggregate. If Contractor maintains higher limits than the specified minimum limits, County requires and shall be entitled to coverage for the higher limits maintained by Contractor.
      2. The insurance shall cover:
        1. bodily injury, sickness, disease, sustained by any person, including death;
        2. property damage, including physical injury to or destruction of tangible property including the resulting loss of use thereof;
        3. cleanup costs, and the loss of use of tangible property that has not been physically injured or destroyed including diminution of value and natural resources damages;
        4. defense costs, including costs, charges, and expenses incurred in the investigation, adjustment, or defense of claims; and
        5. liability assumed by Contractor under a written contract or agreement.
      3. Any deductible or self-insured retention shall be shown on the Certificate of Insurance. If the deductible or self-insured retention exceeds $25,000 it must be approved in advance by County. Contractor is responsible for any deductible or self-insured retention and shall fund it upon County’s written request, regardless of whether Contractor has a claim against the insurance or is named as a party in any action involving the County.

        Contact Risk Management (Outlook: 139 kB) if the retention or deductible exceeds $25,000. We want to verify that the party with whom we are contracting has sufficient assets to fund a large retention or deductible. A waiver is not needed.

        There is no specific field on the Certificate of Insurance for a deductible or retention.

      4. If the insurance is on a Claims-Made basis, the retroactive date shall be no later than the commencement of work.

        In a claims-made policy the claim (demand for money) has to be made during the policy period. However, the injury or damage must occur on or after the retroactive date. The retroactive date is usually the inception date of the first claims-made policy purchased by the contractor. The Certificate of Insurance must show the retroactive date.

      5. Insurance shall be continued for one (1) year after completion of the Work. If the insurance is on a Claims-Made basis, the continuation coverage may be provided by: (a) renewal of the existing policy; (b) an extended reporting period endorsement; or (c) replacement insurance with a retroactive date no later than the commencement of the work.

        You cannot receive evidence that coverage will be continued after the work is complete because policies are issued for only one year. When reviewing the insurance prior to the start of work, you can verify only that the pollution liability is currently in force.

      6. [insert exact name of additional insured] shall be endorsed as additional insureds for liability arising out of ongoing and completed operations by or on behalf of the Contractor in the performance of this Agreement. Additional insured status shall continue for (1) year after completion of the Work.
      7. The insurance provided to the additional insureds shall apply on a primary and non-contributory basis with respect to any insurance or self-insurance program maintained by them.
      8. The policy shall cover inter-insured suits between the Contractor and the additional insureds and include a “separation of insureds” or “severability” clause which treats each insured separately.
      9. Required Evidence of Insurance:
        1. Copy of the additional insured endorsement or policy language granting additional insured status;
        2. Copy of the endorsement or policy language indicating that Insurance is primary and non-contributory; and including an indication of the coverage basis: occurrence or claims-made. If claims-made, the Certificate shall show the policy retroactive date.
        3. Certificate of Insurance including an indication of the coverage basis: occurrence or claims-made. If claims-made, the Certificate shall show the policy retroactive date.
    5. Standards for Insurance Companies

      Insurers, other than the California State Compensation Insurance Fund, shall have an A.M. Best’s rating of at least A:VII.

      A.M. Best is one of the services that reviews insurers’ financial information. We want the insurer to be able to pay its claims. The letter (A+, A, A-, B+, etc.) is Best’s rating of financial strength. The number (XII, VII, etc.) refers to the insurer’s financial size. You can check the rating at: http://www.ambest.com/ - the service is free, but you need to register and log in.

      Department Waiver: You may waive the A.M. Best’s rating if an insurer’s rating is below A:VII.

    6. Documentation
      1. The Certificate of Insurance must include the following reference: [insert contract number or project name].

        Putting the contract number or project name on the Certificate of Insurance does not increase County’s protection. This requirement is included for your convenience.

      2. All required Evidence of Insurance shall be submitted prior to the execution of this Agreement. Contractor agrees to maintain current Evidence of Insurance on file with County for the required period of insurance.
      3. The name and address for Additional Insured endorsements and Certificates of Insurance is: [insert exact name and address].
      4. Required Evidence of Insurance shall be submitted for any renewal or replacement of a policy that already exists, at least ten (10) days before expiration or other termination of the existing policy.
      5. Contractor shall provide immediate written notice if: (1) any of the required insurance policies are terminated; (2) the limits of any of the required policies are reduced; or (3) the deductible or self-insured retention is increased.
      6. Upon written request, certified copies of required insurance policies must be provided within thirty (30) days.

        Because it takes much time and substantial expertise to review an entire insurance policy, we don’t routinely request it. However, if we cannot determine the adequacy of coverage from the certificate and endorsements, this is an option.

    7. Policy Obligations

      Contractor’s indemnity and other obligations shall not be limited by the foregoing insurance requirements.

    8. Material Breach

      If Contractor fails to maintain insurance which is required pursuant to this Agreement, it shall be deemed a material breach of this Agreement. County, at its sole option, may terminate this Agreement and obtain damages from Contractor resulting from said breach. Alternatively, County may purchase the required insurance, and without further notice to Contractor, County may deduct from sums due to Contractor any premium costs advanced by County for such insurance. These remedies shall be in addition to any other remedies available to County.

    Contact Information

    Jamie Bloom, Insurance Manager

    Reesha Ruel, Liability Manager

    Risk Management Division

    Human Resources Department

    Business Hours
    Monday – Friday
    8:00 AM – 5:00 PM
    Contact us by Phone
    Address
    575 Administration Drive
    Room 116 B
    Santa Rosa, CA 95403
    38.465237, -122.725363

    Contracts Exempt from Insurance

    Certain contracts pose low risk, therefore, they are exempt from insurance requirements.

    Learn more