52.228-8 Liability and Insurance-Leased Motor Vehicles
Source: FAR 52.228-8 on acquisition.gov
Contractors leasing motor vehicles to the government must maintain specified insurance coverage, indemnify the government for their own negligence, and provide proof of insurance before work begins.
Overview
FAR 52.228-8 establishes the liability and insurance requirements for contractors leasing motor vehicles to the federal government. The clause delineates the responsibilities of both the government and the contractor regarding loss, damage, injury, or death involving leased vehicles and third parties. It also sets minimum insurance coverage amounts and outlines notification and policy requirements to ensure the government’s interests are protected.
Key Rules
- Government Liability
- The government is responsible for loss or damage to leased vehicles, except for normal wear and tear or contractor negligence, and for third-party property damage or injury/death if covered by the Federal Tort Claims Act.
- Contractor Liability
- Contractors are liable for and must indemnify the government against claims arising from their own (or their agents’/employees’) negligence or wrongful acts.
- Insurance Requirements
- Contractors must maintain insurance with minimum coverage: $200,000 per person, $500,000 per occurrence for bodily injury/death, and $20,000 per occurrence for property damage.
- Notification and Policy Endorsements
- Contractors must notify the Contracting Officer in writing before work begins that insurance is in place, and policies must include specific endorsements regarding cancellation and subrogation.
- Exclusion of Government Liability Costs
- Contractors must not include costs for insurance or contingencies covering losses for which the government is responsible in the contract price.
Responsibilities
- Contracting Officers: Ensure contractors provide required insurance documentation and policy endorsements before work starts.
- Contractors: Obtain and maintain specified insurance, provide written notification, and exclude certain insurance costs from pricing.
- Agencies: Oversee compliance with insurance and liability provisions.
Practical Implications
This clause protects both the government and contractors by clearly allocating liability and requiring adequate insurance. Contractors must be diligent in securing and documenting insurance coverage and understanding which risks are their responsibility. Failure to comply can result in financial exposure or contract delays.
As prescribed in 28.312 , insert the following clause:
Liability and Insurance-Leased Motor Vehicles (May 1999)
(a) The Government shall be responsible for loss of or damage to-
(1) Leased vehicles, except for-
(i) Normal wear and tear; and
(ii) Loss or damage caused by the negligence of the Contractor, its agents, or employees; and
(2) Property of third persons, or the injury or death of third persons, if the Government is liable for such loss, damage, injury, or death under the Federal Tort Claims Act (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title28-section2671&num=0&edition=prelim" target="_blank">28 U.S.C. 2671-http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title28-section2680&num=0&edition=prelim" target="_blank">2680).
(b) The Contractor shall be liable for, and shall indemnify and hold harmless the Government against, all actions or claims for loss of or damage to property or the injury or death of persons, resulting from the fault, negligence, or wrongful act or omission of the Contractor, its agents, or employees.
(c) The Contractor shall provide and maintain insurance covering its liabilities under paragraph (b) of this clause, in amounts of at least $200,000 per person and $500,000 per occurrence for death or bodily injury and $20,000 per occurrence for property damage or loss.
(d) Before commencing work under this contract, the Contractor shall notify the Contracting Officer in writing that the required insurance has been obtained. The policies evidencing required insurance shall contain an endorsement to the effect that any cancellation or any material change adversely affecting the interests of the Government shall not be effective (1) for such period as the laws of the State in which this contract is to be performed prescribe or (2) until 30 days after written notice to the Contracting Officer, whichever period is longer. The policies shall exclude any claim by the insurer for subrogation against the Government by reason of any payment under the policies.
(e) The contract price shall not include any costs for insurance or contingency to cover losses, damage, injury, or death for which the Government is responsible under paragraph (a) of this clause.
(End of clause)