INSURANCE REQUIREMENTS FOR CONSULTANTS
This document contains abridged excerpts taken from State of Georgia ‘Insurance and Bonding Guidelines’ document dated February 2013. A copy of the entire document is located at http://doas.ga.gov/StateLocal/SPD/Seven/Pages/Home.aspx :
I. INSURANCE AND BONDING FUNDAMENTALS
Before we can determine the appropriate type and amount of insurance for your contracts, it is important to understand the concept of exposure.
WHAT IS EXPOSURE?
Exposure is defined as any situation that can lead to a loss or claim against the State of Georgia.
WHAT ARE THE DIFFERENT TYPES OF EXPOSURE?
Exposure can be categorized broadly into two types: situations that can lead to property loss or situations that can lead to injury or medical harm to personnel.
§ Property exposure deals with potential damage to tangible things such as buildings, motor vehicles and personal items caused by the negligent acts by vendors, contractors, state officials, and other third parties.
§ Personnel exposure deals with the potential harm, injury, or illness of any party resulting from the service, delivery, or use of goods that the State procures. Affected parties can include employees, contractors, sub-contractors, customers, and unrelated bystanders.
DO ONLY HIGH VALUE CONTRACTS REQUIRE INSURANCE?
No, the need for insurance is not related to the value of the contract, but to the degree of exposure.
WHY DO VENDORS OR CONTRACTORS NEED TO PURCHASE INSURANCE?
Insurance has two primary benefits:
§ It ensures that vendors and contractors have the financial ability to pay for damages that result from their negligent acts.
§ It protects the State from financial loss as a result of third party acts during the acquisition, delivery, or usage of purchased goods or services.
WHAT ARE THE DIFFERENT TYPES OF INSURANCE?
There are four primary types of insurance:
§ Workers Compensation (WC): provides medical, disability, and rehabilitation benefits to injured employees of the contractor. Georgia law requires any business with three or more workers, including regular part-time workers, to have workers' compensation insurance. For more information, please go to: http://sbwc.georgia.gov/law.
§ Commercial General Liability (CGL): pays for property damage and bodily injury to others resulting from contractor negligence
§ Automobile Liability: pays for bodily injury or property damage resulting from a motor vehicle accident. If the company does not own the vehicle used to perform services for us, they must have at least hired and nonowned auto coverage on their CGL policy.
§ Fidelity Insurance: covers loss due to crime or dishonesty by an employee/contractor. Also known as “Fidelity Bonds.”
[NOTE: There is another type insurance, Professional (Errors & Omissions) Liability Insurance which protects contractors (such as accountants, architects, brokers, consultants, engineers, lawyers) against claims arising from their actual or perceived negligence, errors, and mistakes in the performance of service for others. If Georgia Tech is engaging a consultant/professional to perform work under a service agreement, this type insurance should be added to the agreement under the insurance requirements.]
II. INSURANCE COVERAGE GUIDELINES FOR VENDORS / CONTRACTORS
The following recommended minimum insurance limits apply to vendors doing business with the State of Georgia. The Standard Insurance Limits are recommended for all procurements of goods and ancillary services. The specific requirements for vendors providing high risk services supersede the Standard Insurance Limits. Coverage types and limits are recommended minimums and should be increased as appropriate based on contract value and potential risks to the state. Procuring entities should always consult with appropriate risk management experts. The Georgia State Department of Administrative Services, Risk Management Services, can assist entities in risk management.
HERE ARE THE INSURANCE REQUIREMENTS OUR DIRECTOR OF INSURANCE GENERALLY RECOMMENDS FOR CONSULTANTS:
Provider shall furnish to Georgia Tech a certificate of insurance indicating that the following coverage is in effect and naming officers, agents and employees of the Board of Regents as additional insured.
Type of Insurance Coverages: Limits:
a. Commercial General Liability Premises and Operations $1,000,000 per occurrence
(2007 ISO Occurrence Forms Products and Completed Operations $1,000,000 per occurrence
or its equivalent) Personal and Advertising Injury* $1,000,000 per occurrence
Contractual Liability $1,000,000 per occurrence
General Aggregate $2,000,000
b. Business Automobile Liability $1,000,000 CSL combined single limit
c. Commercial Umbrella Liability $2,000,000 per occurrence
d. Workers Compensation Statutory Limits
Employers Liability Bodily Injury by Accident $1,000,000 per accident
Bodily Injury by Disease $1,000,000 per employee
e. Professional (errors & omissions) Liability $3,000,000 per occurrence
$3,000,000 annual aggregate
For errors and omissions insurance: If coverage is written on a claims-made policy, the Contractor warrants that any applicable retroactive date precedes the effective date of this Agreement and that continuous coverage will be maintained, or an extended reporting (tail) coverage endorsement procured and maintained for a period of not less than two (2) years from the time work under the Agreement is completed.
All insurance coverage (Workers’ Compensation, Commercial General Liability, Business Automobile, Liability, Commercial Umbrella & Professional Liability) shall be issued by insurance carriers licensed by the Insurance Commissioner to conduct business in the State of Georgia and have a minimum current A.M. Best rating of A-, Class VII or better in the most recently published A.M. Best Insurance Report. If during the term of the policy, a company’s rating falls below “A-“ Class “VII”, the insurance must be replaced no later than the renewal date of the policy with an insurer rated at least “A-“ Class “VII” in the most recently published A.M. Best Insurance Report.
Insurance policies meeting the requirements stated above shall be maintained for the duration of the project. Renewal certificates shall be sent to Georgia Institute of Technology thirty (30) days prior to any expiration date of coverage.
*Personal & Advertising Injury protects against libel, slander, and invasion of privacy.
After reading the above information, please complete page 4, “Insurance Consideration” and return to Contracting Officer by uploading it to the requisition in BuzzMart.
INSURANCE CONSIDERATIONS
To be completed by Department Finance or Spend Approval
In order for us to determine what type liability insurance applies to the services performed, please answer the following questions. Read pages 1-3 first, then answer the following:
Requisition NumberContractor/Vendor/Supplier Name
GT Department Name
No. / Question / Answer
1 / Exactly what services will the contractor be providing?
2 / What is the estimated cost of the services being performed?
3 / Where will the work be performed?
4 / Will the contractor be coming on Georgia Tech’s property?
6 / Will the contractor be using their vehicle in the service of this contract?
7 / Will the contractor be interacting with faculty, staff, students?
8 / How many employees does the contractor have? [The law requires any business with three or more workers, including regular part-time workers, to have workers' compensation insurance.
9 / Are there any actual or perceived risks of negligence, errors, and mistakes in the performance of the contractor’s services that could result in the filing of a claim against Georgia Tech? [Professional liability –errors & omission insurance]
10 / Based on the services being performed by this contractor, how would you rate the possibility of a claim being filed against Georgia Tech because of the work of this contractor: [1-Extremely Low Risk, 2-Low Risk, 3-Moderate Risk, 4-High Risk, 5-Extremely High]?
11 / If possible, do you want to waive any of the insurance requirements?
12 / Do you understand if any insurance requirements are waived Georgia Tech and your organization would be liable if a claim is filed based on the services performed by the contractor?
Form Completed by (Name/Phone No)
A copy of this completed form must be attached to the requisition in BuzzMart.
The information you have provided will be reviewed to determine if any of the requirements can be waived. You will be contacted if additional information is needed.
Insurance Requirements for Consultants – Summary– 08 11 2014 Page 1 of 4