Insurance Requirements for Service Contracts



Insurance Requirements for Ministry Contracts

Natural Resource Sector

Contract/Project Name: Contract or File No:

Note: Any “Yes” answer leads to the requirement for insurance.

|Type of Insurance |Insurance Requirement |

| |Yes |No |Comments |Minimum Amount |

|COMMERCIAL GENERAL LIABILITY INSURANCE |

|See EXAMPLES OF ACTIVITIES CONSIDERED HIGH-RISK at the end of this document |

|Does the contract involve: | ( | ( |(CGL) as per Schedule B (works contracts) or |$2 million per occurrence |

|A major works contract? OR | | |Schedule D (services contracts). | |

|Labour intensive services or construction work that | | |The Province must be ‘additionally insured’. | |

|takes place in a location that is: | | |Must include a cross liability clause. | |

|adjacent or nearby private property; or | | |Do not exempt incorporated companies or societies | |

|located where members of the public are or could be | | |from the requirements of CGL. | |

|present, beside the site, or passing through; | | | | |

|such that it poses some potential for damage to private | | | | |

|property or injury/loss to a member of the public or the| | | | |

|Province? OR | | | | |

|there is a requirement for professional liability | | | | |

|insurance? OR | | | | |

|An activity which is inherently dangerous, such as | | | | |

|shoring, blasting, excavating, underpinning, demolition,| | | | |

|removal, pile driving and caisson work, work below | | | | |

|ground surface, and tunnelling and grading? | | | | |

|Endorsements to CGL - Fire Fighting Expense Endorsement |

|Does the contract involve: | ( | ( |May be added to Schedule D (services contract) or |$500,000 - outside fire season. |

|Work in a forested location during fire season where the| | |Schedule B (works contract) where considered |$1,000,000 - during fire season. |

|contractor may be exposed to claims to pay fire fighting| | |necessary. | |

|expenses for fire caused by the contractor, its | | | | |

|employees, or subcontractors? Intended for use where | | | | |

|there is a real possibility the contractor could start a| | | | |

|fire from ground operations (i.e., sparks from | | | | |

|equipment, etc.) | | | | |

|Endorsements to CGL – Sudden and Accidental Pollution Endorsement |

|Does the contract involve: | ( | ( |May be added to Schedule D (services). It is a |Based on the hazards, likelihood |

|Contractor has large amounts of hazardous substances | | |mandatory requirement of all major works contracts |and frequency of occurrence, |

|which, if spilled or released accidentally, could cause | | |and optional for equipment rentals and minor works |potential damages, etc. |

|property damage, bodily injury or be expensive to clean | | |contracts at the discretion of the expense |High impact = higher level of |

|up. Potential for any form of pollution to suddenly and| | |authority, subject to a risk analysis. |coverage. |

|accidentally cause environmental or property damage | | |Note: see also Environmental Impairment Liability |$250,000, $500,000, or $1 million |

|(e.g., an oil or poisonous fluid spill by a dump truck | | |for seeps, drips or leaks, etc., that eventually | |

|or excavator beside a fish bearing stream). | | |cause damage over time) | |

|Note: coverage might be added by endorsement to a CGL | | | | |

|but not every insurer can provide this type of | | | | |

|endorsement, so a stand-alone policy may be necessary. | | | | |

|AUTOMOBILE LIABILITY INSURANCE (ICBC), |

|Does the contract involve: | ( | ( |As per Schedule D (services contract) and Schedule B|Based on the hazards, likelihood |

|The use of one or more vehicles owned, operated, or | | |(works contract). |and frequency of occurrence, |

|licensed in the name of the contractor, which are used | | | |exposure, potential damages, etc. |

|extensively in the performance of the work/services by | | | |High impact/exposure = higher level|

|the contractor while on Crown Provincial forest land or | | | |of coverage. For example, fuel |

|ministry property (excluding driving to/from the work | | | |tanker trucks. |

|site and not using the vehicle any further) (e.g., | | | |$2 to $3 million per occurrence and|

|recreation site maintenance)? | | | |up to $5 million for higher hazard |

|PROFESSIONAL ERRORS AND OMISSIONS LIABILITY INSURANCE |

|Does the contract involve: | ( | ( |As per Schedule D (services contracts). |The required amounts are dependent |

|Services of professionals providing services that | | |Insert the following special indemnification clause |on the type of professional |

|require a degree of specialized skills, expertise or | | |into the services schedule (typically schedule A) or|services being used and are laid |

|knowledge and who are held to a higher standard of care | | |additional terms schedule ONLY if the work is to be |out in the FS1-d under Options #1, |

|than the average person. AND | | |performed by an engineer, architect, landscape |#2, & #3. (Be sure your hidden |

|Could the advice provided, the written specifications, a| | |architect, surveyor, construction and project |text is turned on and you delete |

|prescription, assessment or appraisal, improper | | |manager, applied science technologist, and |hidden text when finalized.) |

|treatment, inaccurate advice, inaccurate or inadequate | | |geoscientist (NOT for any other professional): | |

|information, typographical or recording errors, or the | | |The Contractor and the Province agree that Section |If your ministry uses the GSA |

|design of a structure that is negligent or faulty by | | |____ of the Agreement is deleted and replaced with |contract form, the FS1-d will |

|means of error or omission of the professional result in| | |the following: |provide easy access to copy and |

|significant financial losses or damages or cause bodily | | |The Contractor hereby agrees to indemnify and save |paste the appropriate clause for |

|injury or property damage to the ministry or a third | | |harmless the Province, its successor(s), assign(s) |your use. |

|party? | | |and authorized representative(s) and each of them | |

|NOTE: professional liability insurance would not be | | |from and against all losses, claims, damages, | |

|required if the professional’s advice will not be the | | |actions and causes of action (collectively referred | |

|final recommendation and solely relied on without | | |to as “claims”) that the Province may sustain, | |

|further review by internal ministry or other 3rd party | | |incur, suffer or be put to at any time either before| |

|expertise. | | |or after the expiration or termination of this | |

|Professionals include, but not limited to: | | |Agreement, that arise out of errors, omissions or | |

|architects/landscape architects | | |negligent acts of the Contractor or its | |

|engineers (structural, mechanical, electrical, | | |subcontractor(s), servant(s), agent(s) or | |

|geotechnical, civil, etc.) | | |employee(s) under this Agreement, excepting always | |

|surveyors | | |that this indemnity does not apply to the extent, if| |

|construction and project managers | | |any, to which the Claims are caused by errors, | |

|applied science technologists | | |omissions or the negligent acts of the Province, its| |

|geoscientist | | |other contractor(s), assign(s) and authorized | |

|information technology consultants | | |representative(s) or any other person. | |

|management consulting professionals | | | | |

|financial assurance services | | | | |

|lawyers/law firms | | | | |

|accountants/financial advisors | | | | |

|employment agencies | | | | |

|advertising agencies/graphic designers | | | | |

|forensic and accident investigators | | | | |

|forestry/environmental consultants | | | | |

|scientists like biologists, geologists, chemists | | | | |

|testing/diagnostic laboratories | | | | |

|AVIATION LIABILITY INSURANCE |

|Does the contract involve: | ( | ( |The Province must be ‘additionally insured’. |The required amounts are laid out |

|The operation or use of owned or non-owned aircraft | | |Must have cross-liability clause. |in the FS1-d (if your ministry uses|

|necessary for the performance of the contract (i.e., | | |Note: where the entire aviation portion of the |the GSA contract form, the FS1-d |

|infrared scanning , aerial or drift misapplication of | | |contract will be sub-contracted to another party by |will provide easy access to copy |

|herbicide or fertilizers)? | | |the contractor, the air provider’s own certificate |and paste the appropriate clause |

|Note: aircraft insurance is not required where the | | |of insurance may be substituted for our BC |for your use). |

|aircraft is not used in the performance of the services | | |Certificate of Insurance for this coverage only. |Minimum $50,000 aerial drift or |

|under the contract (i.e., the contractor has opted to | | | |misapplication. |

|utilize aircraft as a means of transportation to/from | | | | |

|the work site). (Incidental use as a means of | | | | |

|transportation to and from the worksite does not require| | | | |

|this liability insurance.) | | | | |

|WATERCRAFT LIABILITY INSURANCE (also known as marine liability insurance) |

|Does the contract involve: | ( | ( |The Province must be ‘additionally insured’. |$2 million per occurrence for |

|Is the use of a floating vessel or structure necessary | | |Must have cross-liability clause |contractors’ own operations and |

|for the performance of the contract and an integral part| | |Note: in some cases this coverage can be included |float homes. |

|of the contractor’s operations (e.g., silviculture | | |in a CGL policy (as determined by the insurance |$5million per occurrence for ferry |

|contract requiring the barging of crew/equipment to the | | |broker). Ask for this policy if you are unsure |services, water taxi, floating |

|work site)? AND | | |about the type of watercraft or whether there would |lodges and any towing operations. |

|It would not be possible to perform the agreement | | |be coverage under the CGL. The certificate of | |

|without it? | | |insurance may come back noting that there is no | |

| | | |policy but that coverage required is already | |

| | | |included in the CGL | |

| | | |Note: for marina facilities, boat storage, boat | |

| | | |repair etc. please contact a CSNR Procurement | |

| | | |Specialist. | |

|Endorsements to Watercraft Liability Insurance - Sudden and Accidental Pollution Endorsement |

|Does the contract involve: | ( | ( |Note: if no endorsement available, a separate policy|Based on the hazards, likelihood |

|Will there be higher risks due to contractor having | | |is required and the COI may come back from the |and frequency of occurrence, |

|large amounts of hazardous substances on the vessel | | |insurance broker noting this. |potential damages, etc. |

|which, if spilled or released accidentally could cause | | | |High impact = higher level of |

|property damage, bodily injury or be expensive to clean | | | |coverage. |

|up? | | | |$250,000, $500,000, or $1 million |

|PROPERTY INSURANCE (ministry assets) |

|Does the contract involve: | ( | ( |Coverage for ministry owned assets |An amount to cover full replacement|

|Will the province’s property be used by the contractor? | | |The Province must be “named insured” |cost. |

|OR | | |Must include a waiver of subrogation in favour of | |

|Will the province’s property be in the care, custody or | | |the Province. | |

|control of the contractor (e.g., storage facilities)? | | |Note: does not include vehicle out for repair or | |

| | | |transportation only (e.g., courier, shipping) of | |

| | | |ministry property (see Motor Truck Cargo Insurance) | |

|ALL-RISK PROPERTY INSURANCE |

|Option #1 - Does the contract involve: | ( | ( |Coverage for services taking place in contractor’s |An amount to cover full replacement|

|Is the contractor performing the work out of their own | | |own facilities |cost and extra expenses to continue|

|facilities? AND | | |Must include a waiver of subrogation in favour of |operations. |

|Is the services being provided major or an essential | | |the Province. | |

|service? AND | | | | |

|If the contractor’s assets are lost or damaged, will it | | | | |

|impair the contractor’s ability to perform the contract?| | | | |

|Option #2 - Does the contract involve: | ( | ( |Coverage for expensive, special, electronic |An amount sufficient to replace the|

|Is the contractor using expensive, special equipment to | | |equipment. |equipment. |

|perform key electronic-based services? AND | | |Must include a waiver of subrogation in favour of | |

|If the contractor’s assets are lost or damaged, will it | | |the Province. | |

|impair the contractor’s ability to perform the contract?| | | | |

|BUILDERS ALL-RISK INSURANCE (construction contracts) |

|Does the contract involve: | ( | ( |As per Schedule B (works contract), where considered|Standard: full value of the |

|Construction of buildings or other above-ground | | |necessary |contract price; or, for road |

|structures and the contract value is > $25,000? | | |Must have a waiver of subrogation in favour of the |construction, the full value/price |

|Construction of bridges and the contract value is | | |Province. |of the bridge, building, culverts, |

|>$100,000? Construction of gravel roads is | | | |or other permanent structure only |

|non-insurable. Where the project includes a high | | | |where these comprise a high |

|proportion of culverts, guard rails, or other | | | |proportion of the project, but not |

|above-ground permanent structures, that portion is | | | |its full value since there are |

|insurable. | | | |other construction aspects in the |

| | | | |contract that are non-insurable |

| | | | |(i.e., excavations, gravel roads, |

| | | | |etc.) |

|CONTRACTOR’S CONSTRUCTION EQUIPMENT INSURANCE (construction contracts) |

|Does the contract involve: | ( | ( |As per Schedule B (works contract) and equipment |An amount to cover all equipment |

|Are there heavy construction machinery, equipment, or | | |rental agreements condition. |used under the contract to enable |

|other assets used by the contractor for performance of | | | |prompt repair/ replacement of the |

|the contract, that, if lost or damaged, would result in | | | |equipment, at contractor’s |

|significant delays in contract completion due or costs | | | |discretion, in accordance with |

|associated with abandonment of the contract? | | | |contract insurance requirements. |

|MOTOR TRUCK CARGO INSURANCE |

|Does the contract involve: | ( | ( |The Province must be ‘named insured’. |An amount sufficient to cover the |

|Stand-alone contract to supply transportation only of | | | |maximum value of the load(s) being |

|ministry owned machinery or equipment? (e.g., courier, | | | |transported per vehicle |

|shipping company, etc.) | | | | |

|EMPLOYEE DISHONESTY INSURANCE |

|Does the contract involve: | ( | ( |Must protect the Province by way of a "third party |Minimum of $5,000 and up to |

|Does the service include security or janitorial | | |endorsement" |$100,000 depending on the values at|

|services, armoured car services, couriers, debt | | | |risk and the number of contractor’s|

|collectors, any contractor handling money or who has | | | |personnel exposed to ministry |

|access to ministry cash or assets? | | | |assets. |

|ENVIRONMENTAL IMPAIRMENT LIABILITY (also known as Pollution Legal Liability, Environmental Site Liability, and Pollution Premises Liability) |

|Does the contract involve: | ( | ( |Contact a ministry Contract Procurement Advisor at |This coverage includes removal, |

|Will there be significant risk of discharge, dispersal, | | |CSNR.ContractSupport@gov.bc.ca |transportation and disposal of |

|release or escape of significant quantities of | | | |contaminants from the site. |

|irritants, contaminants, or pollutants into or upon | | | |It does not typically cover for the|

|land, air, or water and cause harm if accidentally | | | |sole function of transporting, |

|spilled and/or which gradually over a slow, lengthy | | | |warehousing and ultimate disposal |

|period of time seep to neighboring properties building | | | |of hazardous waste unless |

|contamination (i.e., release of pollutants from a pulp | | | |specifically obtained by a company |

|mill into the environment over a 20 year period, leaks | | | |in that business. |

|from fuel tanks at gas stations, etc.)? | | | | |

|PERSONAL LIABILITY INSURANCE |

|Does the contract involve: | ( | ( |Coverage is part of Homeowners Policy. |Minimum amount of $1 million. |

|Is the contract with a private individual that relates | | |Contact a ministry Contract Procurement Advisor at | |

|to use of their private residence for non-commercial | | |CSNR.ContractSupport@gov.bc.ca | |

|purposes on the land or the improvements (e.g., private | | | | |

|moorage, staging site, etc.)? | | | | |

Completed by: Name (print): Signature: Date:

EXAMPLES OF ACTIVITIES CONSIDERED HIGH-RISK

Mandatory CGL Requirements Include (but not limited to):

• all major works contracts

• all Equipment Rental Agreements

• all contracts where Professional Liability Insurance is a requirement

• aerial fertilization3

• aerial cone collection2 (other methods1, 3)

• mechanical site preparation3

• vegetation management (Includes aerial2, ground3, mechanical brushing, or livestock3 methods) (physical methods1, 3)

• forest health - MSMA application3

• forest health - fall and burn2 (pheromone bait trap placement, assessment, and eradication1)

Optional Requirements for CGL (include but not limited to):

• juvenile spacing1, 3

• pruning1, 3

• tree planting1, 3

1 CGL required only if work area adjacent (means bordering or if during fire season, 1 km) to private property or near public facilities or recreational areas (near means potential to encounter users on a regular basis) or if contract term is between April 1 and October 31 or other periods of extreme fire hazard

2 Forest Fire Fighting Liability endorsement to the CGL required throughout the term of the contract

3 Forest Fire Fighting Liability endorsement to the CGL required during fire season (April 1 and October 31st or other extreme fire hazard)

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