Liability & Insurance

Template 19

Use Template 19 for:

TPW Road Projects employing the Special Provisions Bid Book

    Examples: Road and Bridge Work

    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.

    Download Template

    Template Assistant

    This template is consistent with the language and terminology in the TPW Special Provisions Bid Book. If that language is changed for a specific project, or if this template is used with another type of agreement, you must edit the language. For example: if your agency is not the County (SCAPOSD, Water Agency, Fairgrounds, etc..) substitute the correct terminology for all references to "County". If the contract is called "agreement", edit the template to match.

    Section 7. Insurance

    7-1.01 General: The Contractor shall obtain insurance acceptable to County in a company or companies acceptable to the County. The required documentation of such insurance shall be furnished to the County at the time the Contractor returns the executed contract. The proper insurance shall be provided within eight (8) days, not including Saturdays, Sundays and legal holidays, after the bidder has received notice that the contract has been awarded and prior to the county executing the contract and issuing a notice to proceed. The Contractor shall not commence Work, nor allow its employees, subcontractors or anyone to commence Work until all insurance required hereunder has been submitted and approved and a notice to proceed has been issued. Any requirement for insurance to be maintained after completion of the Work shall survive this Contract.

    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 Contract 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 Contract.

    With respect to performance of work under this contract, Contractor shall maintain and shall require all of its subcontractors to maintain insurance as described below:

    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

    I. Contractor - Required Insurance

    The insurance requirements for the contractor and its subcontractors are similar, except for the limits. The limits for subcontractors are shown in the section below labeled "Subcontractors – Required Insurance".

    1. Workers Compensation Insurance & Employers Liability Insurance
      1. Workers Compensation insurance with statutory limits as required by the Labor Code of the State of California.
      2. Employers Liability with minimum limits of $1,000,000 per Accident; $1,000,000 Disease per employee; $1,000,000 Disease per policy.
      3. 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.

      4. Required Evidence of Insurance:
        1. Subrogation waiver endorsement; and
        2. Certificate of Insurance.

      If injury occurs to any employee of Contractor, Subcontractor or sub-subcontractor for which the employee, or the employee’s dependents in the event of employee’s death, is entitled to compensation from County under provisions of the Workers Compensation Insurance and Safety Act, as amended, or for which compensation is claimed from County, County may retain out of sums due, the amount sufficient to cover such compensation, as fixed by the Act, as amended, until such compensation is paid, or until it is determined that no compensation is due. If County is compelled to pay compensation, County may, in its discretion, either deduct and retain from the sums due the amount so paid, or require to reimburse County.

    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:
        1. Projects under $5,000,000: $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 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.

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

          General Aggregate: the most the company 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.

          A policy with no general aggregate is acceptable because there’s no annual cap on the amount the policy will pay.

          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.

          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.

          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.

        2. Projects from $5,000,000 - $9,999,999: $5,000,000 per Occurrence; $5,000,000 General Aggregate; $5,000,000 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.
        3. Projects $10,000,000 and Over: Minimum Limits: $10,000,000 per Occurrence; $10,000,000 General Aggregate; $10,000,000 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 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.
      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 maintained for the entire period of the Work plus one (1) year from the 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.

        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.

      5. [insert exact name of additional insured] – the entity for whom work is being done] shall be additional insureds for liability arising out of ongoing and completed operations by or on behalf of the Contractor in the performance of the Work under this Contract. Additional insured status shall continue for (1) one year after completion of the Work.

        Ongoing operations - Sample Form 4 refers to injuries and damage that happen while the work is in progress.

        Completed operations - Sample Form 5 refers to injuries and damage that happen after the work is complete. We need 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.

        As noted above, you cannot receive evidence in advance that coverage will be continued after the work is complete.

        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.

        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.

      6. [Insert name of Funding Source and/or lender] shall be additional insureds for liability arising out of Contractor’s ongoing operations (ISO endorsement CG 20 26, Additional Insured – Designated Person or Organization, or Equivalent).

        We must get a copy of the endorsement or section of the policy that makes the funding source or lender 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. CG 20 26 - Sample Form 7

        Delete this item if there is no outside funding source or lender. It should also be deleted if the outside funding source or lender is not required to be an additional insured on the contractor’s policy.

      7. [Insert name of Property Owner, Licensor and/or Grantor of Easement] shall be additional insureds for liability arising out of Contractor’s ongoing operations (ISO endorsement CG 20 26, Additional Insured – Designated Person or Organization, or Equivalent).

        We must get a copy of the endorsement or section of the policy that makes the non-employee design professional 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. CG 20 26 - Sample Form 7

        Delete this item if all work is being done on our property. It should also be deleted if the property owner, licensor or grantor of easement is not required to be an additional insured on the contractor’s policy.

      8. [Insert name of Architect, Engineer and/or Surveyor] shall be additional insureds for liability arising out of Contractor’s ongoing operations (ISO endorsement CG 20 32, Additional Insured – Engineers, Architects or Surveyors Not Engaged by the Named Insured, or equivalent).

        We must get a copy of the endorsement or section of the policy that makes the non-employee design professional 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. CG 20 32 - Sample Form 16

        Delete this item if all design professionals for this project are our employees. It should also be deleted if the non-employee design professional is not required to be an additional insured on the contractor’s policy.

      9. 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. To put it another way: the contractor’s policy pays first.

        We must get a copy of the endorsement or section of the policy that has the Primary and 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.

      10. 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.

      11. The policy shall not exclude injury or damage caused by, or resulting from, explosion, collapse and/or underground hazards, subsidence, mold or silica.
      12. The policy shall not contain a Contractors’ Warranty or other similar language which eliminates or restricts coverage because of a subcontractor’s failure to carry specific insurance or to supply evidence of such insurance.
      13. The policy shall be endorsed to include a written waiver of the insurer’s right to subrogate against all persons or entities that are, or are required to be, additional insureds.

        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.

      14. The policy shall cover inter-insured suits between County and Contractor 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.

      15. Required Evidence of Insurance:
        1. Additional insured endorsements or policy language granting additional insured status;
        2. Endorsement or policy language indicating that coverage is Primary and Non-Contributory; and
        3. Certificate of Insurance.
    3. Automobile Liability Insurance
      1. Minimum Limits: $2,000,000 combined single limit per accident The required limit may be satisfied by a combination of Automobile Liability Insurance and either Commercial Excess or Commercial Umbrella Liability Insurance.
        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.
      2. Coverage shall cover all owned, hired and non-owned vehicles.

        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.

      3. The County of Sonoma, its Board of Supervisors, and their employees, representatives consultants and agents shall be defined as insureds under the policy or shall be endorsed as additional insureds..
        In most Business Auto policies the definition of “insured” automatically includes organizations that are legally responsible for an insured’s actions. When a contractor is doing work for us, we are legally responsible for its 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.
      4. Required Evidence of Insurance:
        1. Endorsement or policy language indicating that County, its Board of Supervisors, and their employees, representatives, consultants, and agents are insureds; and
        2. Certificate of Insurance.
    4. Contractors Pollution Liability Insurance
      1. Minimum Limits
        1. Projects not near or over a body of water: $1,000,000 per pollution Incident; $1,000,000 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. Projects near or over a body of water: $2,000,000 per pollution Incident; $2,000,000 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.
        3. 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
      2. 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 Pollution Liability 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.
      5. Insurance shall be maintained for the entire period of the Work plus the additional periods as specified below:
        1. Projects not near or over a body of water: one (1) year after Final Completion and acceptance of the final payment for the Work.
        2. Projects near or over a body of water: Two (2) years after Final Completion and acceptance of the final payment for the Work.
      6. 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.

        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. You do not have to get evidence of the retroactive date.

      7. The County of Sonoma, its officers, agent and employees [insert property owner or licensor if additional insured status is required], [insert funding source if additional insured status is required] shall be endorsed as additional insureds for liability arising out of operations by or on behalf of the Contractor in the performance of the Work.

        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.

      8. 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 County’s self-insured retention or its pollution policy contribute to the claim. To put it another way: the contractor’s policy pays first.

        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.

      9. 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.
      10. Required Evidence of Insurance:
        1. Additional insured endorsement or policy language granting additional insured status;
        2. Endorsement or policy language indicating that coverage is primary and non-contributory; and
        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. Professional Liability/Errors and Omissions Insurance

      (Required if the Contractor or its employees engage in design or professional activities [architecture, engineering or surveying] which are not subcontracted out).

      1. Minimum Limit: $1,000,000 per claim or per occurrence.
      2. 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.

        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.

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

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

        In a claims-made professional liability policy the claim (demand for money) has to be made during the policy period. However, the error must be committed on or after the retroactive date. The retroactive date is usually the inception date of the first claims-made policy purchased by the consultant. You do not have to get evidence of the retroactive date.

      4. Insurance applicable to the work performed under the Contract shall be continued for two (2) years after completion of the work. Such continuation insurance may be provided by one of the following: (1) renewal of the existing policy; (2) an extended reporting period endorsement; or (3) replacement insurance with a retroactive date no later than the commencement of the work under this Contract.

        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 professional liability is currently in force.

      5. Required Evidence of Insurance: Certificate of Insurance.
    6. Increase of Minimum Limits

      Required minimum amounts of insurance may be increased should conditions of Work, in opinion of County, warrant such increase. Contractor shall increase required insurance amounts upon direction by County.

    7. 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.

    8. Documentation
      1. The Certificate of Insurance shall 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 our protection. This requirement is included for your convenience.

      2. Contractor agrees to maintain current Evidence of Insurance on file with County for the required period of insurance. Any requirement to maintain insurance after Final Completion of the Work, including providing Certificates evidencing required coverage(s), shall survive the Contract.
      3. Required Evidence of Insurance shall be submitted to [insert name and mailing 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 is 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.

    9. Policy Obligations

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

    II. Subcontractors - Required Insurance

    With respect to their portion of the work, subcontractors of all tiers shall maintain the same insurance required to be maintained by contractor with limits as follows:

    1. Minimum General Liability Limits: $1,000,000 per Occurrence; $2,000,000 General Aggregate; $2,000,000 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 Subcontractor maintains higher limits than the specified minimum limits, County requires and shall be entitled to coverage for the higher limits maintained by Subcontractor.
    2. Minimum Automobile Liability Limits: $1,000,000 combined single limit per accident.
    3. Minimum Employers Liability Limits: $1,000,000 per Accident; $1,000,000 Disease per employee; $1,000,000 Disease per policy.
    4. Professional Liability Insurance:

      (Required for any architect, engineer, surveyor or other licensed professional engaged by Contractor to perform portions of the Work)

      1. Minimum Limit: $1,000,000 per claim or per occurrence.
      2. Consultant shall disclose to contractor any deductible or self-insured retention in excess of $25,000.
      3. If the insurance is on a Claims-Made basis, the retroactive date shall be no later than the commencement of the work.
      4. Insurance applicable to the work performed under the Contract shall be continued for two (2) years after completion of the work. Such continuation coverage may be provided by one of the following: (1) renewal of the existing policy; (2) an extended reporting period endorsement; or (3) replacement insurance with a retroactive date no later than the commencement of the work under this Contract.
      5. Required Evidence of Insurance: Certificate of Insurance.

    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