Skip to Main Content View Text-Only

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

More Contact Info

Form: Contract Risk Assessment

City Risk LogoInsurance

Risk Management, Portland, OR


 

Contract Risk Assessment

 

Solicitation or Contract Number:                                                          

Contractor Name:                                                                                                                         

 

Instructions:   This risk assessment tool is intended to assist in determining adequate insurance requirements for contracts and agreements.  The point is to determine the amount of potential exposure arising from the project or service.  Refer to the key for definitions of scoring criteria.  Answer the questions with a realistic look at the project.  Do your best to have an objective approach to evaluating the things that can potentially go wrong on the project.  If the questions are answered in a conservative way, the outcome will likely be a high amount of coverage required on each contract.  This may be the risk appetite of your entity and completely appropriate, however, this method will cost the project more money.  If the questions are answered without much thought about the potential exposures, the outcome may be types and amounts of insurance coverage that are not adequate for the project exposures. The goal is to base answers to the questions on likely outcomes if something goes wrong on the project.  After completion, keep this risk assessment in the contract file for future reference.   

                                   

Key:

  • Limited = Driving would only be a small part of the contracted duties e.g. attending periodic meetings.
  • Often = Driving is a required element of accomplishing the contracted work, however, it is not the basis of the work.  The likelihood of being blamed for a contractor’s automobile accident (while performing the work) is moderate.
  • Frequent = Driving is essential to accomplishing the contracted work.  The likelihood of being blamed for a contractor’s automobile accident (while performing the work) is high. 
  • Minor =Would not be serious - the likely outcome or total cost of any property damage or injury is less than $10,000.
    • Property Damage Claims – Damage would be insignificant such as broken windows, gutters damage, landscaping damage, cracked sidewalk, paint damage, minor vehicle or equipment damage.
    • Bodily Injury Claims – Would not be more serious than cuts, scrapes, strains, or bruises. 
  • Moderate =Has the potential to be serious – the likely outcome or total cost of property damage or injury is less than $100,000.
    • Property Damage Claims – Significant property damage such as roof damage, minor structural damage, cracked foundations, or totaled vehicle or equipment.
    • Bodily Injury Claims – Would not cause long term disability or be more serious than broken bones that will heal properly without surgery.
  • Critical =Likely to be serious – the likely outcome or total cost of any property damage or bodily injury is less than $500,000.
    • Property Damage Claims – Major property damage such as short term business interruption, significant structural damage, moderate fire or smoke damage to smaller structures, moderate environmental damage, totaled high value vehicle or equipment.
    • Bodily Injury Claims – Have the potential to cause long term disability, broken bones requiring surgery, internal injuries, or food borne illness.  
  • Catastrophic =Worst case scenario, extremely serious or tragic - the likely total cost of any property damage of bodily injury is over $1,000,000.
    • Property Damage Claims – Disastrous property damage or destruction such as significant business interruption, structural or infrastructure failure, destruction or inability to occupy major structure, significant environmental damage or cleanup. Unrecoverable system failure or data loss.
    • Bodily Injury Claims – Have the potential to cause tragic injury or death, long-term care, significant head injuries, or terminal illness.      

 

 

 

 

Workers’ Compensation:

 

In performing the work -

Workers’ Compensation Coverage Requirements

Does the contractor have employees?

yes

no

If yes, require statutory limits of Workers’ Compensation coverage prior to the contractor beginning work 

If yes, will those employees be working in Oregon?

yes

no

If yes, ORS 656.126 requires contractors with one or more employees (other than themselves) with a physical presence in Oregon must have Workers´ Compensation coverage from a state 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.

 

 

Automobile Liability:  

 

Will the contractor -

How Often?

Score

Use an automobile to accomplish the work?

yes

no

No = 0, Limited = 1, Often = 2, Frequent = 3

 

Travel to or from City locations?

yes

no

No = 0, Limited = 1, Often = 2, Frequent = 3

 

Transport city property, clients, or employees?

yes

no

No = 0, Limited = 2, Often = 3, Frequent = 4

 

 

Total Automobile Score:

 

 

Based on the score, require the contractor to have the following

limits of Automobile Liability coverage:

Score

Limits

0

No coverage required

1  -  3

$500,000 Combined single limit

4  -  6

$1,000,000 Combined single limit

7  -  8

$2,000,000 Combined single limit

8+

$5,000,000 Combined single limit

 

 

Commercial General Liability:

 

While performing the work, could the contractor -

If something goes wrong, how bad is the outcome likely to be?

Score

Cause damage to City property?

yes

no

No = 0, Minor = 1, Moderate= 2, Critical = 3, Catastrophic=4

 

Cause damage to City client’s property?

yes

no

No = 0, Minor = 1, Moderate= 2, Critical = 3, Catastrophic=4

 

Cause damage to citizen’s property?

yes

no

No = 0, Minor = 1, Moderate= 2, Critical = 3, Catastrophic=4

 

Cause bodily injury to City employees?

yes

no

No = 0, Minor = 1, Moderate= 2, Critical = 3, Catastrophic=4

 

Cause bodily injury to City clients?

yes

no

No = 0, Minor = 1, Moderate= 2, Critical = 3, Catastrophic=4

 

Cause bodily injury to citizens?

yes

no

No = 0, Minor = 1, Moderate= 2, Critical = 3, Catastrophic=4

 

Say or write something not true about someone?

yes

no

No = 0, Minor = 1, Moderate= 2, Critical = 3, Catastrophic=4

 

Build or manufacture a product that could cause bodily injury, property damage, or personal injury to someone?

yes

no

No = 0, Minor = 1, Moderate= 2, Critical = 3, Catastrophic=4

 

 

Total General Liability Score:

 

 

Based on the score, require the contractor to have the following

limits of General Liability coverage:

Score

Limits

0

No coverage required

1  -  2

Consider not requiring coverage

3  -  5

$500,000 per occurrence with $500,000 aggregate

6  -  9

$1,000,000 per occurrence with $1,000,000 aggregate

10 - 16

$1,000,000 per occurrence with $2,000,000 aggregate

17 - 26

$2,000,000 per occurrence with $4,000,000 aggregate

27+

$5,000,000 per occurrence with $10,000,000 aggregate

 

 

Professional Liability:  

 

In performing the work, will the contractor - 

 

Score

Be a licensed professional?

yes

no

No = 0, Yes = 1

 

Make professional judgments to accomplish the work?

yes

no

No = 0, Yes = 1

 

Handle confidential information or provide professional services that may affect a client?

yes

no

 

 

 

Give clients professional advice or instruction?

yes

no

 

 

Perform IT design or programming services?

yes

no

 

 

 

Design a structure, building, bridge, or road?

yes

no

 

 

 

Infringe on a copyright, design, or trademark?

yes

no

 

 

 

Build or manufacture a product that could cause bodily injury, property damage, or personal injury to someone?

yes

no

 

 

 

 

If yes to any of the above questions, if the contractor makes an error or omission in judgment in performing this work, how bad is the outcome likely to be? Minor = 1, Moderate = 2, Critical = 3, Catastrophic = 4

 

 

Total Professional Liability Score:

 

 

Based on the score, require the contractor to have the following

limits of Professional Liability coverage:

  

Score

Limits

0 - 2

No coverage required

3

$500,000 per occurrence with $1,000,000 aggregate

4

$1,000,000 per occurrence with $2,000,000 aggregate

5

$2,000,000 per occurrence with $4,000,000 aggregate

6

$5,000,000 per occurrence with $10,000,000 aggregate

 

 

Employee Dishonesty:

 

In performing the work, could the contractor or employees -

 

Score

Steal information from or about the City, clients, or citizens?

yes

no

No = 0, Yes = 1

 

Steal property from the City, clients, or citizens?

yes

no

No = 0, Yes = 1

 

Steal money from the City, clients, or citizens?

yes

no

No = 0, Yes = 1

 

 

 

 

Total Employee Dishonesty Score:

 

Maximum amount of Dishonesty exposure? e.g. the most that could be stolen by contractor or employees

$

 

Based on the score, and the maximum amount of exposure,

require the contractor to have Employee Dishonesty coverage:

Score

Limits

0

No coverage required

1  -  3

Employee Dishonesty coverage (including a Third party Fidelity Bond) in an amount equal to the maximum exposure to theft at any given time during the contract

 

 

Pollution Liability:

 

In performing the work, will the contractor - 

 

Score

Use hazardous materials to perform work?

yes

no

No = 0, Yes = 1

 

Transport hazardous waste or pollutants?

yes

no

No = 0, Yes = 1

 

Remediate pollution?

yes

no

No = 0, Yes = 1 

 

Potentially cause pollution in performing the work?

yes

no

 

 

 

Work in or around water, wetlands, endangered species, or other protected areas?

yes

no

No = 0, Yes = 1 

 

 

Work around or near wells that could be impacted?

yes

no

No = 0, Yes = 1 

 

Excavate any known hazardous materials sites?

yes

no

No = 0, Yes = 1 

 

Work on a project adjacent to or crossing over water?

yes

no

No = 0, Yes = 1 

 

 

 

 

If the contractor makes a mistake while performing this work, how bad is the pollution likely to be? Minor = 1, Moderate = 2, Critical = 3, Catastrophic = 4

 

 

Total Pollution Liability Score:

 

Based on the score, require the contractor to have the following

limits of Pollution Liability coverage:

Score

Limits

0

No coverage required

1  -  2

Consider not requiring coverage

3  -  5

$500,000 per occurrence with $1,000,000 aggregate

6  -  8

$1,000,000 per occurrence with $2,000,000 aggregate

9  - 10

$2,000,000 per occurrence with $4,000,000 aggregate

11 - 12

$5,000,000 per occurrence with $10,000,000 aggregate

 

 

Performance Bonds:

 

In performing the work, will the contractor’s work require -

Performance Bond Requirements:

Performance within a specific time period?

yes

no

  • 279C.380 requires Performance Bonds for public improvement contracts with a value, estimated by the contracting agency, of more than $100,000 or, in the case of contracts for highways, bridges and other transportation projects, more than $50,000. 
  • For contracts requiring performance within a specific time period and detailed specifications for completion of the work, a Performance Bond should be considered.

Performance of detailed specifications outlined in the solicitation or contract?

yes

no

Amount of Contract:

$