Liability & Insurance

Template  20

Use Template 20 for:

Auto related agreements of the following:

  • Auto Repair, Service, Maintenance, Customization, Towing, or Storage

Example: Vendors who work on, tow or store vehicles

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

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 Insurance & Employers Liability Insurance
    1. Required if Contractor has employees.
    2. Workers Compensation insurance with statutory limits as required by the Labor Code of the State of California.
    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. (Sample Form 2 — Workers Compensation Subrogation Waiver)

      Department Waiver: You may waive the requirement for a Workers Compensation Subrogation Waiver if the contractor is unable to obtain it.

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

    If Contractor currently has no employees, Contractor agrees to obtain the above-specified Workers’ Compensation and Employers’ Liability insurance should any employees be engaged during the term of this Agreement or any extensions of the term.

    If the contractor has no employees, Workers Compensation insurance is not required. The contractor is obligated to obtain the insurance if employees are hired after the inception of the agreement. A Risk Management waiver is not needed if the contractor has no employees.

    To verify that the contractor has no employees, Risk Management recommends that you have the contractor sign the Workers Compensation Declaration (Word: 25 kB).

  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: $1,000,000 per Occurrence; $2,000,000 General Aggregate; $2,000,000 Products/Completed Operations Aggregate. 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.

      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 General Liability Limits and the Umbrella Limits must equal or exceed our minimum requirements.

    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 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 for completed operations shall continue for (1) year after completion of the Work under this Agreement.

      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. 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.

    6. 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.

      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.

      Some insurers refuse to add " primary & non-contributory" language. In this situation, you may accept the insurance anyway. Why? Because California Government Code Section 990.8 states that a public agency’s self-insurance and/or participation in a risk sharing pool (CSAC) does not qualify as insurance. Legally, County has no insurance. The coverage provided to County as an additional insured on the Contractor’s policy is the only insurance we have. By default it is primary and non-contributory. It is preferable to have the insurer provide the required language, but not mandatory.

      Marinas & Airport: Because County has commercial insurance for the Marinas & Airport, we do require evidence of primary and non-contributory coverage for all contracts relating to those facilities.

      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.

      Use the alternate Evidence of Insurance language.

    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.

      Department Waiver: You may waive this requirement if the insurer will not provide a Waiver of Subrogation.

    9. 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.
    10. Required Evidence of Insurance:
      1. Copy of the additional insured endorsement or policy language granting additional insured status; and
      2. Certificate of Insurance.


      (Substitute the following for j. if the work, event or location involves marinas or the airport. Do not leave both versions of j. in the agreement!)

    11. 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 coverage is primary and non-contributory; and
      3. Certificate of Insurance.
  3. Automobile Liability Insurance
    1. Minimum Limits: $1,000,000 combined single limit per accident.

      If there is a Commercial Umbrella or Excess Liability Policy, the limits are the sum of the Auto Liability limits plus the Umbrella/Excess limits. If there is no evidence of Auto Liability Insurance, an Umbrella or Excess Liability will not provide Auto Liability Insurance.

    2. Coverage shall apply to all owned, hired and non-owned autos.

      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. Required Evidence of Insurance: Certificate of Insurance
  4. Garagekeepers Insurance

    (Required only if vehicles are taken to the contractor’s facility.)

    Garagekeepers Insurance is usually added to a Business Auto Policy to cover damage to our vehicles which occurs while they are left with the auto service. We require this insurance because the vendor’s General Liability insurance does not cover damage to customers’ property which is in the care, custody or control of the vendor. We want the vendor to have insurance that will pay for damage to our vehicles if the damage occurs at the vendor’s facility.

    Example: our vehicle is at the vendor’s facility for installation of specialized equipment. A fire at the vendor’s facility destroys our vehicle. The vendor’s General Liability insurance will not pay for the damage, but the damage will be covered by the vendor’s Garagekeepers Insurance.

    1. Minimum limit: $50,000 per vehicle, $100,000 per location

      Garagekeepers Insurance limits the amount the insurance company will pay for damage to any one auto. It also limits how much will be paid if multiple customers’ autos are damaged in the same occurrence.

    2. Insurance shall include Comprehensive and Collision.

      Comprehensive covers all damage to a vehicle that is not sustained in an auto accident. Examples of comprehensive claims: fire, theft, vandalism and glass breakage.

      Collision pays for damage to a vehicle sustained in an auto accident.

    3. Deductibles shall not exceed $1,000 per vehicle and $10,000 per event.
    4. Coverage shall apply on a direct primary basis.

      Direct Basis means that damage to our vehicles is covered even if the vendor’s negligence does not cause the damage. For example, if the vendor is test driving our vehicle and is rear ended while stopped at a traffic light, the vendor has not negligently caused the damage; however, the vendor’s Garagekeepers insurance will pay for it.

      Primary Basis means that the Garagekeepers insurance pays for damage whether or not we have our own insurance for the vehicle.

    5. Required Evidence of Insurance: Certificate of Insurance
  5. Garage Policy

    (May be substituted for 2, 3 and 4 above)

    A Garage Policy is an insurance policy that combines General Liability insurance, Auto insurance and Garagekeepers insurance (see explanation above) in a single policy. Businesses that repair, service, modify, store, tow or sell autos may purchase a single Garage Policy instead of separate General Liability and Business Auto (with Garagekeepers insurance) policies.

    We do not require additional insured endorsements for ongoing and completed operations for Garage Policies because these endorsements are not generally available under standard insurance industry forms. We must rely on the indemnification language in the agreement for protection from third party suits.

    1. Garage Coverage Form no less broad than ISO form CA 00 05.
    2. Minimum limits: $1,000,000 per Accident, $2,000,000 Aggregate.

      A Garage Policy differs from a General Liability policy because it has only one aggregate limit. General Liability policies have two aggregates: a General Aggregate and a Products/Completed Operations Aggregate.

    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.

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

    4. The policy definition of "insured contract" shall include assumptions of liability arising out of work performed for a municipality (Definition #5 of the ISO Garage Coverage form, or its equivalent).
    5. The policy shall include Garagekeepers Coverage
      1. Minimum limits: $50,000 per vehicle, $100,000 per location.
      2. Coverage shall include Comprehensive and Collision
      3. Deductibles shall not exceed $1,000 per vehicle and $10,000 per event.
      4. Insurance shall apply on a direct primary basis.
      5. Required Evidence of Insurance: Certificate of Insurance

      There is no specific field on a Certificate of Insurance for a Garage Policy. If you are not sure that the vendor’s Certificate of Insurance is acceptable, please ask Risk Management to review it by submitting a HelpRequest (Outlook: 139 kB).

  6. 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.

  7. 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. 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 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.

  8. Policy Obligations

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

  9. Material Breach

    If Contractor fails to maintain insurance coverage 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 coverage, 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

Katie MacKay, 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