Indemnity & Insurance

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Valerie Craig
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1 Indemnity & Insurance All contracts must contain terms and conditions that ensure adequate insurance coverage by contractors. (Financial Administration Manual, Directive 3301, Section 3.7.2) This directive describes the various insurance requirements contained within standard contracts. Indemnification All contracts must contain an indemnity clause in which the contractor indemnifies the Government against any third party claim arising out of the contractor's performance of the contract. Types of Insurance Coverage Comprehensive General Liability Contractors are required to carry Comprehensive General Liability insurance coverage in an amount not less than $2,000,000. Contact Risk Management and Insurance, Department of Finance, if you feel this limit should be reduced or increased on a contract because of the potential risk involved in the project. Workers Safety and Compensation Commission It is a statutory requirement that all workers be covered under the Workers Safety and Compensation Commission (WSCC) program. GNWT standard contracts provide that, if any contractor is assessed any extra levy, extra assessment, or super-assessment as a result of an accident causing injury or death to an employee of the contractor or subcontractor, or due to unsafe working conditions, these extra amounts will not be reimbursed by the GNWT. In addition, Section 5.5 of this manual describes the requirement for ensuring that contractors are in good standing with the WSCC Procurement Guidelines December

Indemnification All contracts must contain an indemnity clause in which the contractor indemnifies the Government against any third party claim arising out of the contractor's performance of the

2 Insurance Motor Vehicle, Watercraft, Snowcraft Standard Liability The contractor must maintain adequate motor vehicle liability insurance to meet the indemnity agreement with the Government. This coverage must extend to all owned or non-owned, operated and/or licensed vehicles used by the contractor in the performance of the work. The prescribed amounts are as follows: Generally, not less than $1,000,000 per occurrence for injury, death, and damage to property. For buses, not less than $1,000,000 for vehicle hazards, and not less than $1,000,000 for bodily injury to or death of one or more passengers and loss of or damage to passenger property in one accident. For school buses, relevant endorsements with limits of not less than $2,000,000 for bodily injury to or death of one or more passengers and loss of or damage to passenger property in one accident. Aircraft Liability Any aircraft owned or non-owned, operated and/or licensed by the contractor and used in the performance of the work must be covered against bodily injury, death and property damage and passenger hazard, the limit must be $5,000,000 inclusive. These limits may be set higher depending on the type of work performed. Professional Liability Contractors are required to maintain insurance covering claims arising out of failure to render any Professional (Architectural, engineering, legal, medical) service under the contract with limits of not less than $500,000 per claim and $1,000,000 annually. Contracts for semi-professional (Accountant, auditor, consultant, researcher, etc.) services may require Errors & Omissions Liability Insurance. Contact Risk Management & Insurance, Department of Finance. 2 Contract Administration

The prescribed amounts are as follows: Generally, not less than $1,000,000 per occurrence for injury, death, and damage to property.

3 Property (Course of Construction) Property or Course of Construction insurance is physical damage insurance for the project. This insurance insures against most risks of physical loss of or damage to the materials and work in progress. Under the GNWT s existing general property policy the GNWT insures the Course of Construction up to $10 million and the Contractor carries the liability insurance. For projects over $10 million Risk Management and Insurance requires project specific insurance and gets quotes for both Course of Construction and Liability Insurance. The GNWT maintains this form of insurance to protect all those who directly participate in the construction project. Contractors are responsible for certain amounts as described below. The coverage excludes the following: goods in transit to the site highways and ferries contracts water and sewage contracts with no buildings health boards which maintain a separate insurance program which incorporates course of construction coverage Course of Construction insurance coverage is extended to hamlet or settlement buildings when the GNWT owns the materials during the management of construction. However, if full authority or block funding is provided to the hamlet and the municipality undertakes the project, the GNWT insurance will not cover the project. Marine Cargo Marine Cargo insurance is essential when high valued goods are being shipped to the site by marine transportation such as NTCL s tug and barge operations. Marine carriers include basic coverage Procurement Guidelines December

Under the GNWT s existing general property policy the GNWT insures the Course of Construction up to $10 million and the Contractor carries the liability insurance.

4 Insurance Deductibles Certificates Advising Risk Management in the freight tariff but it is insufficient to cover most losses. Risk Management and Insurance should be contacted in advance to obtain cargo coverage. With the exception of Course of Construction insurance, the contractor is responsible for any deductibles, exclusions and/or insufficiencies of coverage related to the policies. In the case of Course of Construction insurance, the contractor is responsible for a portion of the deductible, as follows: For contracts valued in excess of $100,000, an amount equal to 5% of the considered insurable loss to a maximum of $10,000 per occurrence. For contracts valued at less than $100,000, an amount equal to 5% to a maximum of $5,000 per occurrence. Standard contracts require contractors to provide a Certificate of Insurance in the prescribed form. This certificate must be provided by the contractor before the work is started and should not be accepted on non-standard forms without approval of Risk Management and Insurance, Department of Finance. Certain information is required by the Department of Finance, Risk Management Division on construction and renovation contracts valued in excess of $100,000. The attached form is to be completed and forwarded to Risk Management no later than 60 days after contract award for projects up to $10 million. Project above $10 million Risk Management should be notified when the tender document is issued. 4 Contract Administration

With the exception of Course of Construction insurance, the contractor is responsible for any deductibles, exclusions and/or insufficiencies of coverage related to the policies.

5 CONSTRUCTION AND RENOVATION PROJECTS 1. PROJECT NAME: 2. PROJECT LOCATION: 3. PROJECT NUMBER: 4. CONTRACT NUMBER: 5. DATE OF AWARD: 6. CONTRACT AMOUNT: 7. EXPECTED COMPLETION DATE: 8. AWARDED TO: 9. TYPE OF CONSTRUCTION: a) Foundation: b) Main Floor: c) Roof d) Walls e) Exterior Siding f) Interior Siding 10. FIRE PROTECTION: a) Fire Protection within the Building: b) Fire Protection outside the Building: (Distance to nearest fire hydrant) c) Type of Fire Department: (Volunteer, Full Time, Part Time) To be completed for all construction and renovation projects that will have a completed value over $100,000. Please send form to Risk Management & Insurance, Dept. of Finance within sixty (60) days of contract award date. Fax: Procurement Guidelines December

FIRE PROTECTION: a) Fire Protection within the Building: b) Fire Protection outside the Building: (Distance to nearest fire hydrant) c) Type of Fire Department: (Volunteer, Full Time, Part Time)

EDUCATION (K-12) OWNER INSURED CONSTRUCTION PROJECTS

EDUCATION (K-12) OWNER INSURED CONSTRUCTION PROJECTS Insurance and Indemnification Clauses (to be included in Supplementary Conditions to the CCDC 2 2008 Contracts for Education (K-12) projects insured