Use Template 4 for:
Consulting & Professional Services, where professional liability is not required, with:
- Sole Proprietors with Limited Auto Use
Examples: Event Planners & Coordinators, Publicists, Interpreters, etc.
A Special Note About Professional Liability (Cyber Liability; Technology Errors & Omissions)
If the Consultant will have access to individuals' private, personally identifiable information, please use Template 5 or Template 6, as additional Cyber Liability coverages are required. If the situation is questionable, please Contact Risk Management.
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.
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.
With respect to performance of work under this Agreement, Consultant shall maintain and shall require all of its subcontractors, consultants, and other agents to maintain insurance as described below unless such insurance has been expressly waived by the attachment of a Waiver of Insurance Requirements. 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 Consultant from, not 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.
- Workers Compensation and Employers Liability Insurance
- Required if Consultant has employees.
- Workers Compensation insurance with statutory limits as required by the Labor Code of the State of California.
- Employers Liability with minimum limits of $1,000,000 per Accident; $1,000,000 Disease per employee; $1,000,000 Disease per policy.
- Required Evidence of Insurance: Certificate of Insurance
If Consultant currently has no employees, Consultant 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 consultant has no employees, Workers Compensation insurance is not required. The consultant 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 consultant has no employees.
To verify that the consultant has no employees, Risk Management recommends that you have the consultant sign the Workers Compensation Declaration (Word: 25 kB).
- General Liability Insurance
- 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.
- 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 Excess or Commercial Umbrella Liability Insurance. If Consultant maintains higher limits than the specified minimum limits, County requires and shall be entitled to coverage for the higher limits maintained by Consultant.
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, regardless of the number of 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 Excess or General Liability Limits and the Umbrella Limits must equal or exceed our minimum requirements.
- 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. Consultant is responsible for any deductible or self-insured retention and shall fund it upon County’s written request, regardless of whether Consultant 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.
- [insert exact name of additional insured] shall be endorsed as additional insureds for liability arising out of operations by or on behalf of the Consultant in the performance of this Agreement.
Most additional insured endorsements for consultants will make the County an additional insured for liability resulting from the Consultant’s ongoing operations for the County. Additional insured status for liability arising out of completed operations is not required for consultants.
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.
We can accept either ISO form CG 20 10 or CG 20 26 (or their equivalents).
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.
- 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 consultant’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 consultant’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 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.
- 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.
- The policy shall cover inter-insured suits between the additional insureds and Consultant 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 consultant and that the consultant 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.
- Required Evidence of Insurance:
- Copy of the additional insured endorsement or policy language granting additional insured status; and
- Certificate of Insurance
(Substitute the following for h. if the work, event or location involves marinas or the airport. Do not leave both versions of h. in the agreement!)
h. Required Evidence of Insurance:
- Copy of the additional insured endorsement or policy language granting additional insured status;
- Copy of the endorsement or policy language indicating that coverage is primary and non-contributory; and
- Certificate of Insurance
- Automobile Liability Insurance
- Minimum Limits: $300,000 Combined Single Limit per Accident; or Bodily Injury: $100,000 per person/$300,000 per accident and Property Damage: $50,000 per accident.
Department Waiver: You may waive this requirement if the consultant’s work for us does not involve driving or if the driving is limited to occasional driving to attend a meeting.
- Required Evidence of Insurance:
- Copy of Auto Policy Declarations Page; or
- Certificate of Insurance
- 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.
- 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.
- All required Evidence of Insurance shall be submitted prior to the execution of this Agreement. Consultant agrees to maintain current Evidence of Insurance on file with County for the the entire term of this Agreement and any additional periods if specified in Sections 1, 2 or 3 above.
- The name and address for Additional Insured endorsements and Certificates of Insurance is: [insert exact name and address].
- 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.
- Consultant 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.
- 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.
- Policy Obligations
Consultant’s indemnity and other obligations shall not be limited by the foregoing insurance requirements.
- Material Breach
If Consultant 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 Consultant resulting from said breach. Alternatively, County may purchase the required insurance, and without further notice to Consultant, County may deduct from sums due to Consultant any premium costs advanced by County for such insurance. These remedies shall be in addition to any other remedies available to County.
Jamie Bloom, Insurance Manager
Reesha Ruel, Liability Manager
Human Resources Department
575 Administration Drive
Room 116 B
Contracts Exempt from Insurance
Certain contracts pose low risk, therefore, they are exempt from insurance requirements.