Subpart 28.3
Insurance
FAR Subpart 28.3 mandates that contractors maintain appropriate insurance coverage and promptly notify the government of any changes, ensuring risk mitigation for both parties.
Overview
FAR Subpart 28.3 establishes the requirements and policies for insurance in government contracts. It covers the types of insurance contractors must maintain, procedures for notification of policy changes or cancellations, and specific insurance requirements for different contract types and situations, such as overseas work, government property, and transportation services. The subpart also addresses risk-pooling, self-insurance, and the inclusion of appropriate contract clauses to ensure compliance and protection of government interests. Its purpose is to mitigate risk to the government and ensure contractors are adequately insured for liabilities and losses that may arise during contract performance.
Key Rules
- Insurance Policy Requirements
- Contractors must maintain specified insurance coverage as dictated by contract type and work performed.
- Notification of Changes
- Contractors must promptly notify the government of any cancellation or change in insurance coverage.
- Specialized Insurance
- Requirements for insurance against loss or damage to government property, overseas workers’ compensation, and war-hazard insurance are detailed.
- Contract Clauses
- Specific clauses must be included in contracts to address insurance obligations, including for leased vehicles and transportation services.
Responsibilities
- Contracting Officers: Ensure contracts include appropriate insurance requirements and clauses; monitor contractor compliance.
- Contractors: Obtain and maintain required insurance; provide timely notifications of changes; comply with all insurance-related contract clauses.
- Agencies: Oversee compliance and address any deficiencies in contractor insurance coverage.
Practical Implications
- This subpart exists to protect the government from financial loss due to contractor actions or unforeseen events.
- Contractors must be diligent in maintaining and documenting insurance coverage.
- Failure to comply can result in contract termination or financial liability for uninsured losses.