47.102 Transportation insurance
Source: FAR 47.102 on acquisition.gov
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.
(a) The Government generally-
(1) Retains the risk of loss of and/or damage to its property that is not the legal liability of commercial carriers and
(2) Does not buy insurance coverage for its property in the possession of commercial carriers (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title40-section17307&num=0&edition=prelim" target="_blank">40 U.S.C. 17307). (See part 28, Bonds and Insurance.)
(b) Under special circumstances the Government may, if such action is considered necessary and in the Government’s interest, (1) buy insurance coverage for Government property or (2) require the carrier to (i) assume full responsibility for loss of or damage to the Government property in its possession and (ii) buy insurance to cover the carrier’s assumed responsibility. The cost of this insurance to the carrier shall be part of the transportation cost. (The Secretary of the Treasury prescribes regulations regarding shipments of valuables in 31 CFR parts 361 and 362.)
(c)
(1) If special circumstances dictate the need for the Government to buy insurance coverage, the contracting officer shall ascertain that-
(i) There is no statutory prohibition; and
(ii) Funds for insurance are available.
(2) The contracting officer shall document the need and authorization for insurance coverage in the contract file.