Cargo Insurance
Contractors must obtain and maintain agency-approved cargo insurance with specific coverage amounts and provide timely proof and notifications to the contracting agency.
Overview
FAR 52.228-9, Cargo Insurance, requires contractors to obtain and maintain cargo insurance at their own expense for the duration of the contract. The insurance must cover specified amounts per vehicle and for the total shipment, as determined by the contracting agency. All insurance policies must be issued by companies acceptable to the contracting agency and must include terms and conditions specified by the agency. Contractors must provide proof of acceptable insurance before starting contract operations. Additionally, each policy must contain provisions for advance written notice to the agency in case of policy reduction or cancellation, and for timely evidence of policy renewal.
Key Rules
- Cargo Insurance Requirement
- Contractors must secure cargo insurance covering both per-vehicle and total shipment values as specified in the contract.
- Acceptable Insurers and Terms
- Insurance must be from companies approved by the contracting agency and include agency-required terms.
- Proof of Insurance
- Contractors must submit evidence of insurance to the agency before beginning work.
- Policy Notification Provisions
- Policies must require 30 days’ advance written notice to the agency for any reduction or cancellation, and evidence of renewal at least 15 days before policy expiration.
Responsibilities
- Contracting Officers: Specify insurance amounts, approve insurers, and ensure receipt of required documentation.
- Contractors: Obtain, maintain, and provide proof of required cargo insurance; ensure policies include required notification provisions.
- Agencies: Review and approve insurance documentation; monitor compliance with insurance requirements.
Practical Implications
This clause ensures government property in transit is adequately insured, protecting both the agency and contractor from financial loss. Contractors must be diligent in securing compliant insurance and providing timely documentation, as failure to do so can delay contract performance or result in noncompliance. Common pitfalls include inadequate coverage, failure to use approved insurers, or missing notification deadlines.