Section 6 - Insurance
Section 6.2 - Insurance Requirements
Date: 4/10/06 — Approved: Finance Board
VENDORS, SERVICE PROVIDERS, CONTRACTORS, CONSULTANTS, AND OUTSIDE USERS OF FACILITIES
The A.S. can be exposed to risk when using contractors, consultants, service providers, and/or vendors to provide goods or services or when outside organizations and individuals use A.S. premises and/or facilities. A.S. policy requires that contractors, consultants, service providers, and/or vendors doing business with the A.S., as well as outside organizations and individuals using A.S. premises and/or facilities, maintain liability insurance and other insurance as necessary to reasonably protect the A.S.'s financial interests, and in amounts deemed adequate by the AS. In order to protect A.S. interests and other parties as necessary, the A.S. must receive a Certificate of Insurance prior to the commencement of any work and/or scheduled event.
Certificates of Insurance
Certificates of Insurance are issued to the A.S. by insurance carriers and/or self-insurance plan administrators underwriting risks of:
- Independent contractors performing construction or other services to the A.S.;
- Businesses providing services to the A.S.;
- Vendors providing any type of work, activity or product, and
- Miscellaneous other activities as agreed upon in any other contract or Memorandum of Understanding entered into by the A.S.; and
Certificates of Insurance are also issued to the A.S. by insurance carriers and/or self-insurance plan administrators underwriting risks of outside organizations and individuals using A.S. premises and/or facilities.
Large companies that have self-insurance liability programs may not be able to provide a Certificate of Insurance. In this case, a liability coverage statement signed by an authorized corporate officer assuming liability is acceptable if the company has the necessary financial resources to guarantee payment when the law imposes such liability. When evaluating the acceptability of a self-insurance program, the A.S. may request a recent audited financial statement and description of how the Self-Insurance Program is funded.
Indemnification
Contractors, (including subcontractors), consultants, service providers and/or vendors who provide goods or services to the A.S., as well as outside organizations and individuals who use A.S. premises and/or facilities, (hereafter referred collectively to as "Providers/Users") shall indemnify the A.S. against all loss, damage, and expense which it may sustain or for which it will become liable on account of injury to or death of persons, or on account of damage to or destruction of property resulting from the performance of work, the provision of goods or services, and/or the use of A.S. premises and/or facilities, or due to or arising in any manner from Providers'/Users' wrongful acts or negligence, or of any employee of any of them.
A.S. guidelines state the following parties will defend and hold the A.S. harmless from any loss, injury, or damage occurring during the performance of any work or activity and to indemnify The Board of Trustees of the California State University System for any loss sustained as a result of negligence:
- Independent contractors or consultants (including their employees, agents or sub-contractors) performing work under contracts, service agreements, and/or Memorandums of Understanding;
- Outside organizations and individuals (including their employees, agents or sub-contractors) using A.S. premises and/or facilities; and
- Businesses (including their employees, agents, and sub-contractors) providing services as outlined above.
Exceptions to these requirements must be approved by the Associate Executive Director or Executive Director.
A.S. MINIMUM INSURANCE REQUIREMENTS
All parties who are required to show evidence of satisfactory insurance coverage must furnish the A.S. a Certificate or Certificates of Insurance indicating compliance with all requirements. These Certificates must:
- Provide for thirty days (30) advance written notice to the A.S. of any modification, change, or cancellation of any of the insurance coverages.
- List “The Board of Trustees of the California State University System, San Diego State University, The Associated Students of San Diego State University and its employees and agenda” as an additional insured on the insured parties' commercial general liability policy. This provision must state that it shall apply in proportion to, and to the extent of the negligent acts or omissions of the non-A.S. party or any person or persons under the non-A.S. parties' direct supervision and control.
- The insurance companies providing coverage must have a B+: VI or better rating as indicated by the A.M. Best Ratings and Analysis web site at the time of submission, and the contractor, consultant, vendor, affiliate, or service provider must agree to maintain such insurance for the duration of the project or the term for which services will be rendered.
Following are the minimum required coverages:
| Type of Coverage | Amount | |
|---|---|---|
| A. | Worker's Compensation and Occupation Diseases (Part A) | California Statutory Limits or Statutory Limits for the state in which the company is domiciled |
| Employer's Liability (Part B) | $500,000 per occurrence | |
| B. | B. Commercial General Liability (Including contractual liability |
$1,000,000 per occurrence |
| C. | Commercial Auto Liability, if applicable Combined Single Limit OR |
$1,000,000 per occurrence |
| Bodily Injury | $1,000,000 per occurrence | |
| Property Damage | $1,000,000 per occurrence |
Umbrella liability insurance may be used to meet the general liability coverage limit requirements.
Subcontractors must comply with the same insurance coverage requirements as Contractors. Subcontractors must submit the required Certificate of Insurance through the primary Contractor.
When any professional services are performed in connection with an agreement, Professional Liability for the Contractor and its employees and agents (if appropriate) must be maintained to include coverage for errors, omissions, and negligent acts related to the rendering of such professional services with limits not less than $1,000,000 per claim and $3,000,000 in the aggregate. Coverage extensions must include contractual liability. When policies are renewed or replaced, any retroactive date must coincide with, or precede commencement of services by Contractor or sub-contractor under this Contract. A claims-made policy that is replaced or not renewed must have an extended reporting period not less than two (2) years.
Note: Divisions should forward the “A.S. Minimum Insurance Requirements” to the Providers/Users who are providing services or using A.S. facilities and premises. The Providers/Users, in turn, should forward it to their insurance agent or broker for compliance with the requirements set forth.
Exceptions to Minimum Insurance Requirements
Exceptions to the insurance limit requirements outlined may be approved by the Associate Director, following a process of risk identification and evaluation. In such situations, it may be determined that little or no risk is involved, in which case the limits may be lowered or the requirement eliminated. Conversely, it may be determined that additional risk is involved, in which case the limits may be raised.
Modifications to Indemnification Language
A.S. may make modifications to the indemnification language as they deem fit following a process of risk identification and evaluation.
DIVISION RESPONSIBILITIES
Risk management administration is the responsibility of both the Associate Director and A.S.-wide division heads.
- Division heads or their designated budget managers ensure all insurance requirements are met before the effective date of a contract or agreement for services.
- Division heads may employ a risk identification and evaluation process, and, in conjunction with the Associate Director, develop exceptions to the insurance limits and/or requirements outlined in this policy. In some instances, higher limits will be required, while in other instances lower limits may be justified.
- In the absence of the risk identification and evaluation process outlined, the minimum insurance limits as specified in this policy are required.
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