47.207-7 Liability and insurance
Source: FAR 47.207-7 on acquisition.gov
FAR 47.207-7 requires contracting officers to clearly specify contractor liability and insurance requirements in transportation contracts and to include the appropriate FAR clauses to ensure proper risk allocation and protection.
Overview
FAR 47.207-7 outlines the requirements for specifying contractor liability and insurance in government contracts involving the transportation of freight or household goods. It mandates that contracting officers clearly define the contractor’s liability for injuries, property damage, and loss or damage to freight, as well as the required insurance coverage. The section also prescribes the use of specific FAR clauses depending on the type of freight (household goods vs. other freight) and addresses situations where standard liability measures or additional insurance requirements apply. This ensures both parties understand their responsibilities and that adequate protection is in place for government shipments.
Key Rules
- Specification of Liability and Insurance
- Contracting officers must specify contractor liability for personal injury, property damage, and freight loss/damage, and set required insurance amounts.
- Default Liability Standard
- If liability for freight loss/damage is not specified, the standard under 49 U.S.C. 11706 applies.
- Required Clauses
- FAR clauses 52.247-21, 52.247-22, and 52.247-23 must be inserted as appropriate based on the type of freight.
- Additional Insurance Requirements
- Reference to FAR 28.313 and related clauses for cargo and vehicular/public liability insurance when standard coverage is insufficient.
Responsibilities
- Contracting Officers: Must specify liability and insurance requirements, and insert the correct FAR clauses in solicitations and contracts.
- Contractors: Must comply with specified liability terms and maintain required insurance coverage.
- Agencies: Ensure oversight and compliance with liability and insurance provisions in transportation contracts.
Practical Implications
- This section protects the government’s interests by ensuring contractors are adequately insured and liable for damages or losses during transportation.
- It clarifies risk allocation and reduces disputes over responsibility for loss or damage.
- Common pitfalls include failing to specify liability, omitting required clauses, or not verifying insurance coverage.
(a) The contracting officer shall specify-
(1) The contractor’s liability for injury to persons or damage to property other than the freight being transported;
(2) The contractor’s liability for loss of and/or damage to the freight being transported; and
(3) The amount of insurance the contractor is required to maintain.
(b) When the contractor’s liability for loss of and/or damage to the freight being transported is not specified, the usual measure of liability as prescribed in section 11706 of the Interstate Commerce Act (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section11706&num=0&edition=prelim" target="_blank">49 U.S.C. 11706) applies.
(c) The contracting officer shall insert the clause at 52.247-21, Contractor Liability for Personal Injury and/or Property Damage.
(d) The contracting officer shall insert the clause at 52.247-22, Contractor Liability for Loss of and/or Damage to Freight other than Household Goods, in solicitations and contracts for the transportation of freight other than household goods.
(e) The contracting officer shall insert the clause at 52.247-23, Contractor Liability for Loss of and/or Damage to Household Goods, in solicitations and contracts for the transportation of household goods, including the rate per pound appropriate to the situation.
(f) When freight is not shipped under rates subject to released or declared value, see 28.313(a) and the clause at 52.228-9, Cargo Insurance.
(g) When the contracting officer determines that vehicular liability and/or general public liability insurance required by law are not sufficient for a contract, see 28.313(b) and the clause at 52.228-10, Vehicular and General Public Liability Insurance.