Transcript RISK TRANSFER SEMINAR
RISK TRANSFER SEMINAR
Jeffrey M. Tonks YCPARMIA
YCPARMIA TRAINING 2006
Learn more about us at: www.ycparmia.com
Jeffrey M. Tonks YCPARMIA
PURPOSE
RISK = Uncertainty Of Loss The object of risk transfer is to shift potential risks to another party.
Risk Management Theory
RISK AVOID CONTROL FINANCE PREVENTION CLAIM MANAGEMENT RETAIN TRANSFER INSURANCE CONTRACT
Factors Affecting Contractual Risk Transfer
Control of Risk Knowledge of Risk Legal Limitations on Risk Transfer Custom and Practice Bargaining Position Size Competitive Marketplace Reputation of the Parties
Key Contract Provisions
Indemnity Clauses Liability Limitation and Exculpatory Provisions Waivers of Subrogation Insurance Requirements Assure the financial viability Provide a coordinated insurance program Fund a recovery of third party damages Support the indemnity provisions of the contract
Strategies for Transferring Risk to Others
Observe Legal Limitations Back up Indemnity Provisions with Insurance Requirements Reasonable Flexible Update Requirements Additional Insured Status Shared Limits Completed Operations Coverage “Other Insurance”
Strategies for Transferring Risk to Others
Verify Compliance with Insurance Requirements
Certificates of Insurance Errors Notice of Cancellation – “endeavor”
Jeffrey M. Tonks YCPARMIA
INDEMNITY AGREEMENTS
Indemnity Agreement
Hold Harmless and Indemnification are the same thing The indemnitor assumes the liability of the indemnitee Completely independent of insurance coverage The Agreement does not relieve the indemnitee of liability to the injured party Classified based on the scope of obligation
Indemnity Types 4 = What is the “scope of the obligation?” 1. Broad Form - transfers the entire risk = All claims arising from or in “connection with”
“ Should do so expressly and unequivocally so that the contracting party is advised in definite terms of liability to which it is exposed.” Cal. Civil Code 2782 prohibits transferring indemnitee’s sole negligence in construction or design contracts
Indemnity Types 2. Intermediate Form
Assumes all liabilities except those caused by indemnitee’s sole negligence
3. Limited Form (or Comparative Fault)
Obligates indemnitor only to extent of its own fault
4. Hybrid Form
Broad form for some risks and comparative for other risks
Sample Agreement #1
“Contractor shall indemnify, defend, and hold harmless entity and its officers, officials, employees and volunteers from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with contractor’s performance of work hereunder or its failure to comply with any of its obligations contained in the agreement, except such loss or damage which was caused by the sole negligence or willful misconduct of the entity.”
Sample Agreement #1
1.
Take out the indemnity statement: “Contractor shall indemnify, defend and hold harmless” “ Contractor shall indemnify, defend, and hold harmless entity and its officers, officials, employees and volunteers from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with contractor’s performance of work hereunder or its failure to comply with any of its obligations contained in the agreement, except such loss or damage which was caused by the sole negligence or willful misconduct of the entity.”
Sample Agreement #1
2. Take out the who: “entity and its officers, officials, employees and volunteers” “Contractor shall indemnify, defend, and hold harmless entity and its officers, officials, employees and volunteers from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with contractor’s performance of work hereunder or its failure to comply with any of its obligations contained in the agreement, except such loss or damage which was caused by the sole negligence or willful misconduct of the entity.”
Sample Agreement #1
3. Take out the from what: “from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature” “Contractor shall indemnify, defend, and hold harmless entity and its officers, officials, employees and volunteers from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with contractor’s performance of work hereunder or its failure to comply with any of its obligations contained in the agreement, except such loss or damage which was caused by the sole negligence or willful misconduct of the entity.”
Sample Agreement #1
4. Take out the from limitations: “except such loss or damage which was caused by the sole negligence or willful misconduct of the entity” “Contractor shall indemnify, defend, and hold harmless entity and its officers, officials, employees and volunteers from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with contractor’s performance of work hereunder or its failure to comply with any of its obligations contained in the agreement, except such loss or damage which was caused by the sole negligence or willful misconduct of the entity .”
Sample Agreement #1
What is left is the scope: “arising out of or in connection with contractor’s performance of work hereunder or its failure to comply with any of its obligations contained in the agreement” “Contractor shall indemnify, defend, and hold harmless entity and its officers, officials, employees and volunteers from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with contractor’s performance of work hereunder or its failure to comply with any of its obligations contained in the agreement, except such loss or damage which was caused by the sole negligence or willful misconduct of the entity.”
Sample Agreement #2
“ To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner and the Architect and their agents and employees from and against all claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from the performance of the Work, provided that any such claim, damage, loss or expense (i) is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself) including loss of use resulting there from and (ii) is caused in whole or in part by any negligent act or omission of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by a party indemnified hereunder…”
Sample Agreement #2
1.
Take out the indemnity statement: “To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless “ To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner and the Architect and their agents and employees from and against all claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from the performance of the Work, provided that any such claim, damage, loss or expense (i) is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself) including loss of use resulting there from and (ii) is caused in whole or in part by any negligent act or omission of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by a party indemnified hereunder…”
Sample Agreement #2
2.
Take out the who: “the Owner, and the Architect and their agents and employees” “To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner and the Architect and their agents and employees from and against all claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from the performance of the Work, provided that any such claim, damage, loss or expense (i) is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself) including loss of use resulting there from and (ii) is caused in whole or in part by any negligent act or omission of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by a party indemnified hereunder…”
Sample Agreement #2
3.
Take out the from what: “from and against all claims, damages, losses and expenses, including but not limited to attorneys’ fees,” “To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner and the Architect and their agents and employees against all claims, damages, losses and expenses, including but not limited to attorneys’ fees, from and arising out of or resulting from the performance of the Work, provided that any such claim, damage, loss or expense (i) is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself) including loss of use resulting there from and (ii) is caused in whole or in part by any negligent act or omission of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by a party indemnified hereunder…”
Sample Agreement #2
4.
Take out the limitations: “provided that any such claim, damage, loss or expense (i) is attributable to bodily injury… (ii) is caused in whole or in part by any negligent act or omission of the Contractor… regardless of whether or not it is caused in part by a party indemnified hereunder…” “employees from and against all claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from the performance of the Work, provided that any such claim, damage, loss or expense (i) is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself) including loss of use resulting there from and (ii) is caused in whole or in part by any negligent act or omission of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by a party indemnified hereunder…”
Sample Agreement #2 What is left is the scope: “arising out of or resulting from the performance of the Work”
“employees from and against all claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from the performance of the Work, provided that any such claim, damage, loss or expense (i) is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself) including loss of use resulting there from and (ii) is caused in whole or in part by any negligent act or omission of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by a party indemnified hereunder…”
Indemnity Issues
Does the injury or damage fall within the subject matter of the hold harmless clause?
Arising from or arising under Arising out of the project Arising out of, incident to, or in connection with the agreement or the performance of the work or services hereunder… Arising out of or resulting from the performance by … Broad interpretation with a “but for” test Narrow interpretation of “clear and unequivocal” (CA)
Indemnity Issues
Indemnity Clauses
Scope Subject Matter DURATION When a contract terminates the clauses within also terminate Absent clear and unequivocal language Contrast Additional Insured Status under the insurance policy
Jeffrey M. Tonks YCPARMIA
Waivers Of Subrogation
Waivers of Subrogation
Doctrine of Subrogation allows a party who has paid a loss or debt on the part of another, to succeed to the rights of that other party to pursue recovery from a third party, who was responsible for causing the loss.
Waivers of Subrogation Insurance
Insurance payments; LC 3852 re: Workers’ Comp Helps reduce insurance costs/premiums Can be reduced by comparative against employer Limited to the rights of the insured – Waiving the right to recover Allocation of recoveries- who gets paid first?
Insured cannot prejudice the subrogation rights of the insurer Post-loss vs. pre-loss waivers WC double recover with waiver of subrogation Subrogation is not waived; the derivative right is Most policies allow a pre-loss waiver; but examine the policy Endorsing a waiver of recovery may cause additional premium Generally an insurer cannot subrogate against its insured, nor its additional insured
Jeffrey M. Tonks YCPARMIA
Contractual Liability Coverage
Contractual Liability Coverage INSURANCE: THE MONEY BEHIND THE PROMISE
Contractual Liability Coverage (Standard Forms)
ISO forms and edition dates
Manuscript and non-ISO forms
Contractual Liability Coverage (Standard Forms)
Commercial General Liability Policy (CGL) Automatically provides insureds with “broad form blanket contractual liability coverage” Insuring Agreement – We will becomes legally obligated pay those sums that the insured to pay as damages because of “bodily injury” or “property damage” to which the insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage to which this insurance does not apply. We may at our discretion investigate “suit” that may result.
any “occurrence” and settle any claim or
Contractual Liability Coverage (Standard Forms)
Contract Exclusion – This insurance does not apply to… “Bodily Injury” or “property damage” for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages: (1) that the insured would have in the absence of the contract or agreement; or (2) assumed in a contract or agreement that is an “insured contract”, provided the “bodily injury” or “property damage” occurs subsequent to the execution of the contract or agreement.
Contractual Liability Coverage (Standard Forms)
a) Insured Contract Definition – “Insured Contract” means: A contract for a lease of premises… b) c) A sidetrack agreement Any easement or license agreement… d) e) An obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a municipality An elevator maintenance agreement
Contractual Liability Coverage (Standard Forms)
f) That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “BI” or “PD” to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.
Does not include that part of any contract or agreement: That indemnifies a railroad…arising out of construction…within 50 feet of any roadbed… That indemnifies an architect, engineer or surveyor arising out of…preparing plans, maps… Under which the insured, if an architect, engineer, or surveyor…
Contractual Liability Coverage (Standard Forms)
Business Auto Policy (BAP)
For our purposes: coverage comparable to the CGL An insured contract includes a car rental agreement, but excludes paying for damage to the rented vehicle Does not cover a vehicle leased “with a driver”
Contractual Liability Coverage (Standard Forms)
Umbrella and Excess Policies
Language varies among insurers Coverage for contracts has traditionally been very broad
Contractual Liability Coverage (Standard Forms)
Professional Liability Policies CGL policies generally exclude professional services Language varies among insurers and types of professionals Coverage for assumption of another’s professional liability is usually limited to the same kind for which the insured is covered Contract exclusion might limit coverage to acts of the insured CGL is needed for non-professional indemnity agreements
Contractual Liability Coverage (Standard Forms)
Pollution Liability Insurance (CPL)
CGL usually excludes coverage Written on a scheduled project basis Has contract exclusion subject to exceptions for “covered contracts” Indemnity agreement between the named insured contractor and the client is a “covered contract” Some require a schedule of indemnity agreements
Jeffrey M. Tonks YCPARMIA
ADDITIONAL INSURED
Additional Insured
Require the indemnitor to obtain coverage against the loss on behalf of the indemnitee Or arrange for its own insurance coverage to be modified to cover the indemnitee Declaration Page
Named insureds
More stringent occurrence reporting requirements Employees, executive officers and directors are insured Certain exclusions only apply to the named insured Must pay the deductible Must pay the premium May cancel the policy Only the “first” named insured receives the cancellation notice
Other persons who qualify as insureds based on their relationship with the named insured Other entities may be added as insureds by means of endorsement
Reasons To Require Additional Insured Status
Problems with the Hold Harmless
Chevron USA v Bragg Crane (Cal App) – while there is a limit to the amount of risk that can be transferred under an indemnity contract, there is no such limit on obtaining insurance Note: scope of coverage will not always match up with indemnity agreement Additional insured status is not an alternative
Direct right of defense
Subrogation- generally an insurer cannot subrogate against its insured
Protection maybe limited so consider a waiver of subrogation
Personal injury coverage is added only if indemnitee is an insured Obtaining coverage not otherwise available (ex. Malpractice) Unenforceable indemnity agreement
“Other Insurance” - CGL
Interplay between the indemnitee’s CGL and the Indemnitor’s CGL (additional insured)
Standard pre-1997 CGL coverage is primary but contributory
Current CGL: excess over any other primary insurance for which you have been added as an additional insured by “attachment of endorsement” “Primary and non-contributory” endorsement
Breach of contract on primary issue
Umbrella policies are not standard forms
Completed Operations
Losses that arise after the work has been completed and accepted
Pre-1993 additional insured endorsements included completed operations coverage- arising out of “your work”
Post-1993 additional insured endorsements limit coverage to “liability arising out of your ongoing operations”
Endorsements
CG 20 10 – Owners, Lessees or Contractors
Most widely used “Arising out of”
CG 20 09 – Owners, Lessees or Contractors
Attached to policies that do not provide contractual liability coverage Covers vicarious liability and general supervision
CG 20 11 – Managers or Lessors of Premises
Coverage ends when no longer a tenant Only that part of the premises leased to you
CG 20 12 – State or Political Subdivisions—Permits CG 20 33 – Owners, Lessees or Contractors—Automatic Status When Required in Construction Agreement
Does not have to be issued naming the specific party Limited to the time during which operations are actually being performed
CG 20 07 – Engineers, Architects or Surveyors: excludes professional liability
Endorsements
Umbrella policy will usually follow underlying policy
No endorsement, but handled in the policy
Cancellation Notice
Policy only requires notice to the “first named insured”
California Insurance Code section 677.2(b) “…named insured at the mailing address shown on the policy…”
Additional Insured Auto Liability
Vicarious Auto Liability extended in the “who is an insured” section by covering anyone liable for the conduct of an insured CA 20 48 – Designated Insured Endorsement- restates “who is an insured”
Additional Insured Commercial Property
Requires an insurable interest in the insured property Loss payee No standard additional insured form The main advantage would be to cut off subrogation liens Builder’s Risk—shifting interests and no subrogation
Additional Insured Workers’ Compensation
Generally cannot be named as an additional insured Organization may be responsible if contractor fails to purchase Require the contractor to have coverage Subrogation Require the contractor to name you on the CGL Hold-harmless clause A waiver of subrogation (does not protect against an employee action)
Additional Insured Third-Party-Over Action
Injured employee collects on workers comp from employer, then Sues a third party contributing to the injury; The third party tenders back to the employer under an indemnity contract/additional insured provision
Protective Liability Insurance
AN ALTERNATIVE TO ADDITIONAL INSURED
Owners and Contractors Protective Liability Insurance (OCP)
Contractor purchases insurance directly on behalf of the project owner “Arising out” of operations and general supervision are covered
Narrow coverage ends with project-no completed operations
CGL type exclusions
Contractor who purchases policy is not insured by it
Coverage is primary
Subrogation against the purchasing contractor is allowed absent a waiver
Costs more than additional insured status
Protective Liability Insurance
Construction Project Management Protective Liability
Similar to the OCP, but adds the architect, engineer or surveyor along with the construction manager Professional services exclusion Automatic waiver of subrogation
Jeffrey M. Tonks YCPARMIA
INSURANCE FORMS
Insurance Forms
Insurance Services Office (ISO)
Dominant position with nearly 3000 insurance company customers Insurers can develop their own forms/manuscript forms Use of these standardized forms has the advantages of prior legal interpretations, similarity for statistical data, and price comparison
Insurance Forms
Form numbering and addition dates Example: CG 20 10 03 97 CG: commercial general liability form 20: indicates the category (additional insured) of endorsement 10: the unique number assigned to this endorsement 03 97: indicates the March 1997 edition of CG 20 10
Types Of Insurance
Commercial General Liability (CG 00 01) = CGL Covers BI, PD, Personal and advertising injury Insured premises and operations in progress, products and completed operations, contractual assumption of liability Occurrence or claims made (rare) Per occurrence limits and aggregate limits Per-project and per location general aggregate endorsements Exclusions – WC, Auto, EPL, Pollution, E&O
Types Of Insurance
Business Auto Coverage Form (CA 00 01)
Covers BI, PD and Physical Damage for “any auto” Subject to an “each accident” single limit- no aggregate Coverage for “insured contract” Severability of interests clause Exclusions
Types Of Insurance
Workers’ Compensation (W 00 00 01)
Covers statutory benefits, employer liability, other states coverage Policy limits are subject to sublimits for employer liability “Additional insured” status is generally not available
Types Of Insurance
Commercial Property (CP 00 01)
Physical damage to buildings and contents Named perils or all risk coverage ACV or replacement coverage Coinsurance clause
Types Of Insurance
Environmental Impairment Liability – no set forms
Pollution Legal Liability Covers liability for the release of pollutants from specified locations and includes clean up costs Claims-made form Contractors Pollution Legal Liability Specialized version of PLL for contractors Specific project or blanket Claims made Environmental Professional Liability E&O Coverage for professionals
Types Of Insurance
Professional Liability
E&O Malpractice Failure to use due care and the degree of skill expected of a person in the same profession Occurrence but usually claims made
Jeffrey M. Tonks YCPARMIA
INSURANCE REQUIREMENTS
Insurance Requirements
Insurance operates independently of the indemnity agreement
Do not reference insurance in the indemnity agreement
Reflect agencies risk philosophy concerning the degree of protection
Be sensitive to the insurance market Modifications to standard policies or modifications to existing insurance program causes problems, additional cost (that is buried and passed on) and delays
General Provisions
Evidence of Insurance – should be required
Certificate
Certificate with amendments and attachments
Copy of the policy
Reserve the right if dispute later arises
Include punitive measure if not provided
General Provisions
Notice of Cancellation – needed to encourage replacement coverage
Standard certificates do not require notice to holders Insurer will “endeavor to” provide 30 days advance notice
Insurers might modify time
A requirement of notice is refused by most insurers
General Provisions
Deductibles and Retentions – less is best
Require the amount be declared and subject to prior approval
Judge how much your contractor can afford
Allocate responsibility for paying to the insurance purchaser
Consistent with the indemnity agreement
Self-Insurance – is it insurance?
Need to evaluate a self-insurance program to determine if it will meet its obligations “Other Insurance” is not self-insurance in California
Insurance Company Ratings
A.M. Best
A VII or better
Insurance Company Ratings
• • • • • • • • • • •
A++ and A+ A and A B++ and B+ B and B C++ and C+ C and C D E F S NR 1-5 Superior Excellent Very Good Fair Marginal Weak Poor Under regulatory supervision In liquidation Rating suspended Not rated due to insufficient info or request
Insurance Company Ratings VII or Better
Financial Size – Reserves in millions of dollars
XV
XIV
XIII
XII
XI
X
IX
VIII
VII greater than 2000 1500 to 2000 1250 to 1500 1000 to 1250 750 to 1000 500 to 750 250 to 500 100 to 250 50 to 100
Limits Of Liability
Limits of Liability
Set agency guidelines for minimum levels/not exact amounts
Each contract can be reviewed looking at the following factors:
Prevailing practices in the industry
The size of the business providing the service
The current insurance market place
The type of service being provided
The risk
Limits Of Liability
Example: Shropshire v. Walnut Creek decided 5/5/03
15 yr old swimmer pushed off from wall and was hit by a diver off of the 3 meter board – quadriplegic
City pool rented for last 15 years to Diablo Divers and the WC Aquanuts with no division between the two activities Indemnity agreement in favor of the city backed by each with a $5M policy Divers and Aquanuts settled prior to trial for $4m leaving $6M for the city
Jury verdict $27,750,000 with 60% to the city for a dangerous condition: net exposure to the city $20,759,925.
INSURANCE CERTIFICATES
Jeffrey M. Tonks YCPARMIA
It keeps going and going…
Insurance Certificates
Certificate holder vs. Additional Insured
Standard certificate is the ACORD form
Standard Certificate
Insurance Certificates
Manuscript certificate Certificate holders right to notice of cancellation “Endeavor to” and “but failure to do so…” Conflicts between the certificate and actual coverage Disclaimer: “This certificate is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend or alter the coverage afforded by the policies below.”
Insurance Certificates
Underlying contract insurance requirements
Disclaimer: “The policies of insurance listed below have been issued…notwithstanding any requirement, term or condition of any contract…”
Certificate Tracking
Verify the required coverages are in force Monitor ongoing compliance
Jeffrey M. Tonks YCPARMIA
YOLO COUNTY CONTRACTS
Yolo Contracts Purchase Order
Purchase Order
Condition #16: The vendor agrees to defend, indemnify, and hold harmless the County of Yolo, its officers, employees, agents and servants, for any and all liability caused by the negligence or wrongful act of the vendor arising out of the performance of this agreement, or any act of omission of vendor, its agents, employees and servants, or for product liability or breach or warranty by vendor, either expressed or implied, and to pay all claims, damages, judgments, legal costs, adjuster fees and attorney fees related thereto.
Yolo Contracts Short-Form Agreement
Short-Form Agreement
Term #5: CONTRACTOR, at his sole cost and expense, shall obtain and maintain throughout the entire term of this contract, the insurance set forth in Exhibit A attached hereto.
Term #6: CONTRACTOR shall defend, indemnify, and hold harmless the COUNTY, its officers, officials, employees and agents from any and all claims, demands, liability, damages, cost or expenses (including but not limited to attorney fees) in law or equity that may at any time arise or be asserted based in whole or in part upon any negligent or other wrongful act or omission of the CONTRACTOR, it’s officers, agents, or employees.
Yolo Contracts Short-Form Agreement
EXHIBIT A INSURANCE REQUIREMENTS A.
During the term of this Agreement, Contractor shall at all times maintain, at its expense, comprehensive general liability insurance, Workers’ Compensation and Employers’ Liability insurance as required by the State of California, professional liability/malpractice/errors and omissions insurance and automobile liability insurance (including coverage for hired and non-owned vehicles). The comprehensive general liability insurance shall include broad form property damage insurance.
[NOTES: 1. These provisions are illustrative only. In many cases, professional liability insurance (malpractice insurance) isn’ t necessary, while other situations may suggest different types of insurance. Many situations also do not require $1M/$2M levels of insurance. 2. Risk Management
issues (including the types & amounts of recommended insurance & significant indemnification issues) should be evaluated early in the process of evaluating the desirability of a particular contract, in consultation with the County’s Risk Manager & YCPARMIA as appropriate; this will enable you to provide & discuss the necessary information with venders early in the negotiation process.]
The limits of such insurance shall be no less than $1,000,000 per individual/ $2,000,000 per occurrence for the comprehensive general liability insurance, statutory limits for the Workers’ Compensation /$ 1,000,000 for Employers’ Liability insurance per accident for bodily injury or disease, $2,000,000 per occurrence for the professional liability/malpractice/errors and omissions insurance, and $1,000,000 general and $500,000 property per occurrence for the automobile liability insurance.
[note: these limits need to be reviewed based upon the scope of services, nature of the contractor, etc.; please review with Risk Management] 2.
Said policies shall remain in force through the life of this Agreement and shall be payable on a “per occurrence” basis unless the County Risk Manager specifically consents in writing to a “claims made” basis. If the County Risk Manager does consent to “claims made” coverage, in the event that the Contractor changes insurance carriers Contractor shall purchase “tail” coverage covering the term of this Agreement and not less than three years thereafter. Proof of such “tail” coverage shall be required at any time that the Contractor changes to a new carrier prior to receipt of any payments due.
3.
The County, its officers, agents, employees and volunteers shall be named as additional insured on all but the workers’ compensation and professional liability coverages.
4.
The Contractor shall declare all aggregate limits on the coverage before commencing performance of this Agreement, and the County’s Risk Manager reserves the right to require higher aggregate limits to ensure that the coverage
Yolo Contracts Short-Form Agreement
limits required for this Agreement as set forth above are available throughout the performance of this Agreement.
5.
Any deductibles or self-insured retentions must be declared to and are subject to the approval of the County Risk Manager.
6.
Each insurance policy shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the Director (ten (10) days for delinquent insurance premium payments).
7.
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise approved by the County Risk Manager.
8.
The policies shall cover all activities of Contractor, its officers, employees, agents and volunteers arising out of or in connection with this Agreement.
o)~ For any claims relating to this Agreement, the Contractor’s insurance coverage shall be primary, including as respects the County, its officers, agents, employees and volunteers. Any insurance maintained by the County shall apply in excess of, and not contribute with, insurance provided by Contractor’s liability insurance policy.
10.
The insurer shall waive all rights of subrogation against the County, its officers. employees, agents and volunteers.
B.
Prior to commencing services pursuant to this Agreement, Contractor shall furnish the Director with original endorsements reflecting coverage required by this Agreement. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf All endorsements are to be received by, and are subject to the approval of, the County Risk Manager before work commences. Upon County’s request, Contractor shall provide complete, certified copies of all required insurance policies, including endorsements reflecting the coverage required by these specifications.
C.
During the term of this Agreement, Contractor shall furnish the Director with original endorsements reflecting renewals, changes in insurance companies and any other documents reflecting the maintenance of the required coverage throughout the entire term of this Agreement. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf Upon County’s request, Contractor shall provide complete, certified copies of all required insurance policies, including endorsements effecting the coverage required by these specifications.
Yolo Contracts “Long-Form” Contract
Yolo Contracts “Long-Form” Contract
Yolo Contracts “Long-Form” Contract
Yolo Contracts “Long-Form” Contract
Jeffrey M. Tonks YCPARMIA