28.303
Insurance against loss of or damage to Government property
Contractors must ensure that any insurance covering Government property in their possession explicitly discloses the Government’s interest to protect both parties in case of loss or damage.
Overview
FAR 28.303 addresses the requirements for insuring Government property that is in the possession or control of a contractor. When the Government mandates or approves insurance for such property, coverage can be arranged either through separate insurance policies or by extending the contractor’s existing insurance to include these risks. A critical requirement is that any insurance policy covering Government property must clearly disclose the Government’s interest in that property. This ensures that, in the event of loss or damage, the Government’s rights are protected and claims can be processed appropriately.
Key Rules
- Insurance Requirement
- The Government may require or approve insurance to protect against loss or damage to its property held by contractors.
- Policy Structure
- Insurance can be provided via specific policies or by including the risk in the contractor’s existing insurance arrangements.
- Disclosure of Government Interest
- All relevant insurance policies must explicitly state the Government’s interest in the insured property.
Responsibilities
- Contracting Officers: Must ensure that insurance requirements are specified and that policies disclose the Government’s interest.
- Contractors: Must obtain and maintain appropriate insurance, ensuring the Government’s interest is disclosed in all relevant policies.
- Agencies: Oversee compliance and may approve insurance arrangements.
Practical Implications
- This section protects the Government’s property interests when items are in contractor custody.
- Contractors must coordinate with their insurers to ensure proper policy language.
- Failure to disclose the Government’s interest could jeopardize claims or contract compliance.