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Service Agreements Insurance Requirements from Executive Order
849
Executive
Order 849 defines insurance requirements for agreements, contracts,
and purchases. The campus may also choose to increase insurance
coverage amounts above what EO 849 requires.
The process for verifying appropriate insurance
coverage is on a case by case basis. Each event or service
has unique characteristics. The types of insurance and limits
of coverage a vendor carries may vary somewhat from the standards
set forth in EO 849 or those advertised in the Request for Proposal
package. Therefore, Risk Management will carefully analyze each
to make a determination if coverage is acceptable. Standards apply
to all vendors however, exceptions to coverage can be made upon
consultation with the Risk Manager.
The vendor is expected to provide proof of coverage
that insurance standards are met prior to work occurring.
The majority of service orders and contracts
necessitate general insurance requirements per EO 849 as follows:
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General Liability: comprehensive
or commercial form minimum limits each Occurrence $1,000,000,
General Aggregate $2,000,000.
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Employer Liability: $1,000,000.
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Business Automobile Liability: minimum
limits for Owned, Scheduled, Non-Owned, or Hired Automobiles
with a combined single limit of not less than $1,000,000 per
occurrence.
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Workers' Compensation: as required
under California State Law.
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Errors and Omission insurance is required
for professional service consultants and professional service
design architects/engineers.
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Hold Harmless Provision: reference
CSU General Provisions for Service Agreements as maintained
in the Contract Resource Library.
Exceptions: The limits shown above will generally be required
for service providers involved in low-risk activities. Higher
limits will be required for service providers performing potentially
high-risk activities. Campus risk managers should be consulted
for the minimum requirements.
Evidence of Adequate Coverage - Insurance Requirements
Evidence of adequate insurance coverage is required
by furnishing to the University a certificate of insurance that
includes an additional insured endorsement and each insurer shall
have an A.M. Best (or equivalent) rating of at least A:VII unless
otherwise agreed to by the University.
An additional insured endorsement must accompany
each certificate (workers' compensation excepted). Standard
insurance form #CG 20 10 10 01 is accepted - Endorsement
is to be on a separate page and the wording on the endorsement
is to be exactly as follows:
- The State of California; the Trustees of The California State
University; California State University, Chico; and the officers,
employees, volunteers and agents of each of them are included
as additional insureds.
- Coverage shall not be cancelled, modified, or reduced without
thirty (30) days advance written notice to the University, delivered
by certified mail, return receipt requested.
Types of Insurance - Basic Definitions
- Business (or commercial) Automobile
- provides coverage for business automobiles regardless
of whether they are owned, leased, hired or borrowed.
- Employer Liability / Workers Compensation Insurance
- provides four types of benefits for job related
injuries or disease. They are medical care, disability, death,
and rehabilitation.
- Environmental Impairment (pollution) -
covers negligent acts and/or omissions by the individual or
organization resulting in damage to the environment.
- Equipment Floater - covers equipment that
moves from location to location from perils of nature or collision.
- Errors and Omissions - coverage for various
professions that require protection of negligent acts and/or
omissions resulting in bodily injury, personal injury, and/or
property damage liability to a client. Typically architects
are required to carry Errors and Omissions.
- Excess Insurance - coverage above the primary
amount of insurance coverage.
- Fidelity Bond - coverage that guarantees
that the insurance company will pay the insured business for
money or other property lost because of dishonest acts of
its employees. The bond covers dishonest acts such as
larceny, theft, embezzlement, forgery, misappropriation, wrongful
abstraction, or willful misapplication.
- Garage or Garage Keepers Insurance - coverage
for injury, property damage or destruction for which the insured
garage or its representative become legally liable resulting
from the operation of the garage.
- General Liability - coverage for an insured
when negligent acts and/or omissions result in bodily injury
and/or property damage when someone is injured as the result
of using the product manufactured or distributed by a business
or when someone is injured in the general operations of a
business.
- Liquor Liability - legislation that makes
an establishment or individual selling liquor responsible
for injuries caused by its customers to a third party.
- Professional Liability Insurance - coverage
for specialists in various professional fields that work with
the general public and have greater than average expertise
in particular areas, for example lawyers, surgeons, druggists,
and insurance agents.
- Property Insurance - indemnifies an insured
whose property is stolen, damaged or destroyed by a covered
peril.
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