Liability & Insurance

Template 9

Use Template 9 for:

Real Estate Leases/License Agreements - County as Landlord.

    • Licensee is required to maintain premises and, subject to approval, may make improvements and alterations to the premises.

    Examples: Leases or long term license agreements.

    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

    Contract with pen

    Download Template 9
    (Word: 22 kB)

    Template Assistant

    Tenant 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.

    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 Lease or failure to identify any insurance deficiency shall not relieve Tenant from, nor be construed or deemed a waiver of, its obligation to maintain the required insurance at all times during the term of this Lease.

    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 Tenant 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.
      5. Required Evidence of Coverage:
        1. Subrogation waiver endorsement, and
        2. Certificate of Insurance

      If Tenant currently has no employees as defined by the Labor Code of the State of California, Tenant 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.

      If the tenant has no employees, Workers Compensation insurance is not required. The tenant 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 tenant has no employees. To verify that the tenant 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; the General Aggregate shall apply per location. The required limits may be provided by a combination of General Liability Insurance and Commercial Excess or Commercial Umbrella Liability Insurance. If Tenant maintains higher limits than the specified minimum limits, County requires and shall be entitled to coverage for the higher limits maintained by Tenant.

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

        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.

        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. Tenant is responsible for any deductible or self-insured retention and shall fund it upon County’s written request, regardless of whether Tenant 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 Tenant (ISO endorsement CG 20 11 "Additional Insured -Managers/Lessors of Premises" – 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.

        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.


        (Substitute the following for d. (above) if this is a LICENSE AGREEMENT. Do not leave both versions of d. in the Lease!)

        d. [insert exact name of additional insured] shall be endorsed as additional insureds for liability arising out of the Licensee’s operations or premises rented to Licensee (ISO endorsement CG 20 26 or equivalent.)
      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 tenant’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 tenant’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 Tenant’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 Tenant 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 tenant and that the tenant 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 Coverage:
        1. Copy of the additional insured endorsement or policy language granting additional insured status, and
        2. Certificate of Insurance

        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 Coverage:

      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. Property Insurance for Business Personal Property and Tenants’ Improvements (Required only during the Post-Construction Period)

      Tenants’ Improvements are changes to the County’s property made and paid for by the tenant. When the tenant leaves, the improvements remain and become the property of the County.

      Examples: buildings, structures, carpeting, lighting, interior walls, plumbing, built-in cabinets. If the current tenant is using improvements made by a prior tenant, the current tenant is not required to insure them.

      We require tenants to insure their improvements because we have a long term economic interest in the improvements and want them to be insured if they are damaged. We also require the tenant to insure its personal property (furniture, fixtures, stock, equipment, etc.) located at our premises. If that property is destroyed, the tenant will be able to replace it with insurance proceeds, allowing the tenant to continue operations and continue paying rent.

      Department Waiver: You may waive this requirement if the current construction cost of the improvements is under $25,000.

      1. Property insurance on a “special form” or “all risks” basis.

        “Special Form” or “All-Risks” means the property is insured for all losses unless the specific cause of loss is excluded. Some of the common exclusions are: earthquake and other earth movement, flood, wear & tear, lack of maintenance.

      2. Minimum Limit: the full current combined replacement cost of Tenant’s Business Personal Property and Tenant’s improvements.
      3. The insurance shall apply on a replacement cost basis, without deduction for depreciation.

        Replacement Cost means that the insurer will pay for property based on the current cost for new improvements, without subtracting anything for age, use or wear and tear.

        Example: If carpeting installed five years ago is destroyed, the insurer pays for new carpeting of the same quality. The insurer does not subtract anything for physical depreciation.

      4. Tenant shall disclose any deductible or self-insured retention in excess of $25,000 and such deductible or self-insured retention must be approved in advance by County. Tenant is responsible for any deductible or self-insured retention.

        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.

      5. Required Evidence of Insurance: Certificate of Property Insurance or Evidence of Commercial Property Insurance
    4. Automobile Liability Insurance
      1. Minimum Limit: $1,000,000 combined single limit per accident. The required limits may be provided 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 Tenant currently owns no autos, Tenant 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 cover hired and non-owned autos.
      4. Hired Autos: vehicles the tenant rents or borrows.

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

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

      5. Required Evidence of Insurance: 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.
      Department Waiver: You may waive the A.M. Best’s rating if an insurer’s rating is below A:VII.

    7. Documentation
      1. The Certificate of Insurance must include the following reference: [insert location or other identifier].

        Putting the location 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. Tenant 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. Tenant 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

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

    9. Material Breach

      If Tenant fails to maintain insurance coverage 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 Tenant resulting from said breach. Alternatively, County may purchase such required insurance and Tenant 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