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Office of Management & Finance

Bureau of Internal Business Services

BIBS is the provider of central services for the City of Portland

1120 SW 5th Avenue, Room 1250, Portland, OR 97204

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Insurance Clauses by Type P - Z

Click on the Links Below to go to the Specific Sections 

 

Insurance Clauses By Type, P-W

 

Recommended Clauses

Notes

When Do They Apply?

POLLUTION LIABILITY

Pollution Liability.  Contractor or appropriate sub-contractor shall obtain, at their expense, and keep in effect during the term of the Contract, Pollution Liability Insurance covering their liability for bodily injury, property damage and environmental damage resulting from sudden accidental (insert “and gradual” only if appropriate) pollution and related cleanup costs incurred by the Contractor or appropriate sub-contractor, all arising out of the work or services (including the transportation risk, when applicable) to be performed under this Contract. Limits of coverage per occurrence shall not be less than $ _______. Aggregate limits of coverage shall not be less than $__________.
 

  • Covers bodily injury and property damage liability caused by pollution incident, reasonable and necessary clean-up costs for an actual or potential incident.
  • The policy can cover sudden and accidental, or gradual pollution, or both.
  • Pollution Liability Coverage insurance policies are usually issued on a “claims made” basis. Require "Tail" Coverage for all "claims made" coverage. Note: "Tail" Coverage should be required for at least that maximum time the pollution incident could cause continuing exposure, or the maximum available in the market place.  Note:  Your Contractor may not be able to obtain the continuous Tail coverage wanted for the exposure or the coverage may be very expensive.  Many times, the maximum time period of coverage available may be much less than desired for the exposure.  In these cases, your bureau will need to make a business decision about minimum time period acceptable.
  • May be endorsed onto Commercial General Liability and/or Automobile Liability coverage (with separate limits).
  • Blanket or project-specific Pollution Liability coverage is normally available. 
  • Note: Although there are standard endorsement extensions and policies that enable insurers to provide Pollution Liability coverage, most Pollution Liability forms are manuscript policies designed by individual insurers interested in writing Pollution Liability coverage. 
  • For asbestos removal contracts, if possible, get a policy endorsement for Asbestos Liability (with separate limits.) If the Pollution Liability policy cannot be endorsed for Asbestos Liability, have the Contractor or appropriate sub-contractor get a separate policy. Asbestos Abatement Liability policies cover third party bodily injury or property damage arising out of the removal of asbestos by the Contractor or appropriate sub-contractor from specified locations during the policy period. 

 

Setting Limits:

 

Ask questions such as, but not limited to:  

  • What is the potential loss exposure if something goes wrong when handling the hazardous materials?
  • Probable costs associated with this exposure include bodily injury, property damage, clean-up and defense costs.
  • Use when a Contractor will be using, removing, hauling, storing, or disposing of hazardous materials.
  • Normally used to clean up pollution excluded by other policies.
  • Sudden and Accidental Pollution coverage is usually required when contracts specify using, removing, or hauling hazardous materials.
  • Gradual pollution coverage is usually required for contracts involving storing, or disposing of hazardous materials (in addition to Sudden and Accidental coverage).

 

PROFESSIONAL LIABILITY OR ERRORS AND OMISSIONS

Professional Liability Coverage. Contractor shall obtain, at Contractor’s expense, and keep in effect during the term of this Contract, Professional Liability Insurance covering any damages caused by an error, omission or any negligent acts of the Contractor, its sub-contractors, agents, officers, or employees performance under this Contract. Limits of coverage per occurrence shall not be less than $ _______.  Aggregate limits of coverage shall not be less than $ _______.
 
Errors and Omissions Coverage. Contractor shall obtain, at Contractor’s expense, and keep in effect during the term of this Contract, Errors and Omissions Insurance covering any damages caused by an error, omission or any negligent acts of Contractor, its sub-contractors, agents, officers, or employees under this Contract. Limits of coverage per occurrence shall not be less than $ _______.  Annual aggregate limits of coverage shall not be less than $ _______.

 

  • Defends and pays Contractor’s liability for property damage and bodily injury caused by errors, omissions, or mistakes made in the Contractor’s professional judgment.
  • Examples of contractors who can buy this coverage include: doctors or medical practitioners, architects, engineers, counselors, therapists, IT professionals, accountants, translators, educators, insurance brokers, testing facilities and research laboratories. In many cases, contractors can buy Professional Liability coverage from groups or associations that they belong to. Coverage is specific to the nature of the profession.
  • For attorneys, the Oregon State Bar Professional Liability Fund(link coming soon) provides $300,000 aggregate limits of coverage. Participation in this program is mandatory for all attorneys engaged in private practice whose principal office is in Oregon. If the potential risk exposure is greater than this amount, consider requesting higher limits of coverage. Other alternatives include the addition of risk control measures or other non-insurance risk transfer clauses in your contract document.
  • The terms "Professional Liability" and "Errors and Omissions" mean the same thing and are used interchangeably.
  • A Professional Liability policy only covers the acts of the insured (professional). This type of policy will never name another person or entity as “additional insured.” However, a Contractor can purchase a policy that covers all of its employees.
  • Professional Liability and Errors and Omissions insurance policies are generally issued on a “claims made” basis. Require "Tail" Coverage for all "claims made" coverage.
  • Some professions may be unable to obtain Professional Liability coverage. If the exposures arising out of duties under the contract could be interpreted as “negligence”, as opposed to “negligence arising out of professional judgment”, require Commercial General Liability
  • Many times, it is appropriate to require both Professional Liability and Commercial General Liability Coverage. When a Professional Liability insurer denies the claim, the City may be able to recover the loss under the Commercial General Liability Coverage.  It is important to perform a case-by-case basis risk assessment on each contracting situation.
  • Consider requiring a Performance Bond when agencies not only want the work completed, but want it to be done on time and according to specifications.

 

Setting Limits:   

  • Assess the risks of the particular contract to determine appropriate insurance limits and risk control measures.
  • Ask questions such as, but not limited to: What kind of error or omission in professional judgment could the Contractor make while performing contractual activities?  How bad could it be? If professional liability coverage is not available, will Commercial General Liability coverage protect the city from almost all that could go wrong?
  • Use if Contractor’s work is in a professional field requiring specialized knowledge and intellectual skills. This includes professionals who are licensed or accredited as well as non-licensed professionals. 
  • Do not use in trade services contracts limited to physical or manual work.

 

TRUCKERS COVERAGE

Truckers Coverage Form. Contractor shall obtain, at Contractor’s expense, and keep in effect during the term of this Contract, Truckers Coverage Form Insurance covering  “all owned or non-owned vehicles." This coverage may be written in combination with the Commercial General Liability Insurance (with separate limits). Limits of coverage per accident or occurrence shall not be less than $ _________.
  

  • Defends and pays Contractor’s liability for property damage and bodily injury to others while operating owned and non-owned trucks in the capacity of acting as a common carrier.
  • If the Contractor is hauling a trailer owned by the City, insure that this insurance includes Trailer Interchange Coverage. This is coverage for the legal liability of truckers for loss or damage to non-owned trailers and equipment which are in the insured’s possession under a written trailer or equipment interchange agreement. A trailer interchange agreement is an arrangement whereby one trucker transfers a trailer containing a shipment to a second trucker for continued transportation.
  • Setting Limits: Assess the risks of the particular contract to determine appropriate insurance limits and risk control measures.
  • Use when contracting for transit by a common carrier, or trucking entity that will be driving a truck on behalf of the City. 
  • If Contractor transports hazardous substances, waste, and/or materials require Pollution Liability coverage.

 

Motor Truck Cargo Liability Coverage.  Contractor shall obtain, at Contractor’s expense, and keep in effect during the term of this Contract, Motor Truck Cargo Liability Insurance covering loss to cargo in transit during the performance of this contract. This coverage may be written in combination with the Commercial General Liability Insurance (with separate limits). Combined single limit per accident or occurrence shall not be less than $ __________. 

  • Covers the common carriers legal liability for loss to covered property while under their care, custody, or control that the carrier becomes legally obligated to pay under a bill of lading, contract of carriage, or shipping receipt.
  • Check the policy exclusions to ensure your property will be covered.
  • Check to ensure that all costs, including extra expenses are included in coverage limits. Make sure to include the amount of any potential additional costs, expenses, fees, fines, penalties, or other damages.

 

Setting Limits:  Insurance limits should be high enough to cover the replacement, repair, or recovery of the property that will be in transit. 
 

  • Use when contracting for transit by a common carrier, or trucking entity to cover city property during the transit and while in the care, custody, or control of the carrier

WORKERS´ COMPENSATION AND EMPLOYERS LIABILITY INSURANCE    

Workers´ Compensation.  All employers, including Contractor, that employ subject workers who work under this contract in the State of Oregon shall comply with ORS  656.017 and provide the required Workers´ Compensation coverage, unless such employers are exempt under ORS 656.126. Contractor shall ensure that each of its sub-contractors complies with these requirements. 

  • ORS 279.320 requires Workers’ Compensation coverage on all public contracts. There are two basic parts of a Workers’ Compensation policy:

 

Part A: Workers’ Compensation Insurance: Insurance that covers an employer’s statutory responsibilities for injuries, disability, or death to persons acting in the scope of their employment. 
 
Part B:  Insurance that provides coverage against an employer’s common law liability for bodily injury to employees occurring within the scope of their employment when that liability is not covered by Workers’ Compensation. 

 

  • ORS 656.029 makes the agency liable for Contractor’s Workers’ Compensation unless you get proof of Contractor’s coverage before work starts. Insurance from other states and extraterritorial coverage may not be enough. 
  • Pays medical costs and loss of income to employees for work related injuries. 
  • Alternative insurance called “wrap-up” may apply on very large construction projects ($90 million in construction costs).
  • Normally Required. 
  • Contractors with one or more employees (other than themselves) with a physical presence in Oregon must have Workers´ Compensation coverage from a city with extraterritorial reciprocity, or they must obtain Oregon specific Workers´ Compensation coverage. 
  • No other coverage is acceptable. 
  • Call the Department of Consumer & Business Services, Workers’ Compensation Division, Employer Compliance Section at (503) 947-7815 with questions, or to confirm Contractor coverage.

WRAP UP INSURANCE

Wrap Up

  • Wrap up insurance is also called Controlled Insurance Program. It means the Project Owner, or General Contractor buys one policy to cover the entire project. All sub-contractors are enrolled in the project.  
  •  Recommended by the Risk Management Division to assist bureaus in reducing costs, managing sub-contractors, and improving safety on very large construction projects ($90 million and up). If you are in need of this type of coverage, contact the Risk Management Division.

Note: Assess the risks of the particular contract to determine appropriate insurance limits and risk control measures.  Do not rely on insurance or bonds to cover all of the risk associated with your contract.  Many times outcome based statements of work, contract administration, and supervision are far better risk control measures to protect the city's interests than insurance or bonds.

 

 

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