Liability & Insurance

Template 7

Use Template 7 for:

Contractors Performing Construction-Related Repair and/or Maintenance with no Pollution Exposure.

    Examples: Janitorial, Plumbing, Electrical, Repairs, Maintenance, Landscaping, Painting, etc. (No pollution exposure)

    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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    Download Template 7
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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. Any requirement for Contractor to maintain insurance 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. County’s failure to demand evidence of full compliance with the insurance requirements set forth in this Agreement or County’s 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. Required if Contractor has employees as defined by the Labor Code of the State of California.
        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.
      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.

        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 General Aggregate shall apply separately to each Project. The required limits may be satisfied by a combination of General Liability Insurance and either 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.

        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. 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.

        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 additional insureds for liability arising out of ongoing and completed operations by or on behalf of the Contractor in the performance of this Agreement. The foregoing shall continue to be additional insureds 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.

        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 the additional insureds 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.

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

      j. 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 Limits: $1,000,000 combined single limit per accident. The required limit may be satisfied by a combination of Automobile Liability Insurance and Commercial Excess or 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. Insurance shall cover all owned autos. If Contractor currently owns no autos, Contractor agrees to obtain such insurance should any autos be acquired during the term of this Agreement or any extensions of the term.
      3. Insurance shall cover 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.

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

    5. 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. Contractor shall submit all required Evidence of Insurance prior to the execution of this Agreement. Contractor agrees to maintain current Evidence of Insurance on file with County as specified in Sections 1–3 above.
      3. The name and address for Additional Insured endorsements and Certificates of Insurance is: [insert exact name and address].
      4. Contractor shall submit required Evidence of Insurance 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, Contractor shall provide certified copies of required insurance policies 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.

    6. Policy Obligations

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

    7. Material Breach

      If Contractor fails to maintain insurance which is required pursuant to this Agreement, such failure 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