Liability & Insurance

Template 24

Use Template 24 for:

Telecommunications Leases

    Mandatory Contractual Language

    Insurance requirements should be saved and attached to the contract as an exhibit. Please edit the template so that references to the party with whom you are contracting matches the agreement. 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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    Lessee shall maintain and require its subcontractors and agents to maintain, during the term of this Lease or any extensions of the term, insurance as described below unless such insurance has been expressly waived by the attachment of a Waiver of Insurance Requirements.

    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 lease 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. Required if Lessee 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 the lessee’s employee is injured on the job, the worker’s 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 of Workers Compensation Subrogation Waiver)

      5. Required Evidence of Insurance:
        1. Subrogation waiver endorsement, and
        2. Certificate of Insurance.
      6. If Lessee currently has no employees, Lessee agrees to obtain the above-specified Workers’ Compensation and Employers’ Liability insurance should any employees be engaged during the term of this Lease or any extensions of the term.

    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; the General Aggregate shall apply separately to each location. The required limits may be provided by a combination of General Liability Insurance and Commercial Umbrella Liability Insurance. If Lessee maintains higher limits than the specified minimum limits, County requires and shall be entitled to coverage for the higher limits maintained by Lessee.

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

        General Aggregate: the most the company will pay for all claims during the policy period, 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.

        Department Waiver: You may waive the requirement for a separate per location 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. Lessee is responsible for any deductible or self-insured retention and shall fund it upon County’s written request, regardless of whether Lessee 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. [insert exact name of additional insured] shall be additional insureds for liability arising out the ownership, maintenance or use of that part of the premises leased to Lessee (ISO endorsement CG 20 11 or equivalent).

        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.

      5. 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 lessee’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 lessee’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 Coverage language.

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

        If the Lessee’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.

      7. The policy shall cover inter-insured suits between County and Lessee 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 lessee and that the lessee 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.

      8. Required Evidence of Insurance:
        1. Copy of the additional insured endorsement or policy language granting additional insured status, and
        2. Certificate of Insurance.
      9. (Substitute the following for h. (above) if the location involves marinas or the airport. Do not leave both versions of h. in the Lease!)

      h. 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: $1,000,000 combined single limit per accident.
      2. Insurance shall apply to all owned autos. If Lessee currently owns no autos, Lessee agrees to obtain such insurance should any autos be acquired during the term of this Lease or any extensions of the term.
      3. Insurance shall apply to hired and non-owned autos.

        Hired Autos: vehicles the lessee rents or borrows.

        Non-owned Autos: vehicles owned by the lessee’s employees and contractors.

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

      4. Required Evidence of Insurance: Certificate of Insurance.
    4. Pollution Liability Insurance
      1. Minimum Limits: 1,000,000 per pollution Incident; 1,000,000 Aggregate. If Lessee maintains higher limits than the specified minimum limits, County requires and shall be entitled to coverage for the higher limits maintained by Lessee.
      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. Lessee is responsible for any deductible or self-insured retention and shall fund it upon County’s written request, regardless of whether Lessee 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.

      3. If the insurance is on a Claims-Made basis, the retroactive date shall be no later than the Commencement Date of this Lease.

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

      4. Insurance shall be continued for five (5) years after the expiration or earlier termination of this Lease. If the insurance is on a Claims-Made basis, the continuation Insurance 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 Date of this Lease.

        You cannot receive evidence that coverage will be continued after termination of the lease because policies are issued for only one year. When reviewing the insurance prior to the inception of the lease or during the term of the lease, you can verify only that the insurance is currently in force.

      5. [insert exact name of additional insured], shall be additional insureds for liability arising out of the ownership, maintenance or use of the Premises. The foregoing shall continue to be additional insureds for five (5) years after the expiration or earlier termination of this Lease.

        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. Required Evidence of Insurance:
        1. Certificate of Insurance.
    5. Increases in Limits of Insurance

      County may periodically require higher policy limits if such increased limits are reasonably available in commercial insurance markets.

    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 must include the following reference: [insert location or other reference].

        Putting a reference 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 Lease. Lessee 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. Lessee 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

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

    9. Material Breach

      If Lessee fails to maintain insurance which is required pursuant to this Lease, it shall be deemed a material breach of this Lease. County, at its sole option, may terminate this Lease and obtain damages from Lessee resulting from said breach. Alternatively, County may purchase such required insurance and Lessee shall immediately reimburse County for 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