28.313
Contract clauses for insurance of transportation or transportation-related services
FAR 28.313 mandates specific insurance clauses in transportation contracts to ensure adequate coverage and risk protection for both the government and contractors.
Overview
FAR 28.313 prescribes the use of specific insurance-related contract clauses for transportation and transportation-related service contracts. It directs contracting officers to include the Cargo Insurance clause (FAR 52.228-9) in most such contracts, except when freight is shipped under rates with released or declared value. Additionally, it requires a clause similar to Vehicular and General Public Liability Insurance (FAR 52.228-10) when statutory insurance requirements are deemed insufficient. These requirements ensure that both government and contractor interests are protected against potential losses or liabilities during transportation activities.
Key Rules
- Cargo Insurance Clause (52.228-9)
- Must be included in transportation or transportation-related contracts unless freight is shipped under released/declared value rates.
- Vehicular and General Public Liability Insurance Clause (52.228-10)
- Must be included (or a substantially similar clause) when legal insurance requirements are not adequate for transportation or transportation-related contracts.
Responsibilities
- Contracting Officers: Ensure the correct insurance clauses are included in solicitations and contracts as required by the regulation.
- Contractors: Comply with the insurance requirements specified in the contract clauses, maintaining appropriate coverage.
- Agencies: Oversee compliance and ensure risk mitigation through proper insurance provisions.
Practical Implications
- This section exists to mitigate financial and liability risks associated with government transportation contracts.
- Contractors must be aware of and comply with insurance requirements to avoid contract breaches or uncovered liabilities.
- Common pitfalls include omitting required clauses or misunderstanding when exceptions apply (e.g., released/declared value shipments).