Transportation insurance
The Government typically does not insure property in transit with commercial carriers, but may do so or require carrier insurance under special circumstances, with proper justification and documentation.
Overview
FAR 47.102 outlines the Government’s policy regarding transportation insurance for its property during shipment. Generally, the Government retains the risk of loss or damage to its property unless the loss is the legal liability of the commercial carrier, and does not purchase insurance for property in the possession of commercial carriers. However, under special circumstances, the Government may purchase insurance or require the carrier to assume full responsibility for loss or damage and obtain insurance accordingly. The cost of such insurance, if required from the carrier, is included in the transportation cost. Contracting officers must ensure there is no statutory prohibition and that funds are available before purchasing insurance, and must document the need and authorization in the contract file. This section also references related regulations for shipments of valuables and directs users to FAR Part 28 for further guidance on bonds and insurance.