1. Construction & Vendor Contracts Insurance Requirements

2. Why Not AIA Contract Language? Often is not current. Is too generalized for public entities. Includes insurance for architects and engineers. Why? Difficult to understand and/or amend.

3. Before Work Begins Contractor shall not commence work until all required bonds and insurance coverages have been obtained and such insurance has been reviewed and accepted by the Owner. Certificates of Insurance on the current ACORD form shall be issued to the Owner showing all required insurance coverages.

4. Bonds Required Construction Construction, installation and service contracts (including repair and alteration) exceeding $50,000 require that 100% Performance and Payment Bonds be furnished by the successful bidder (contractor). All such bids must include a 5% Bid Bond.

5. Bonds Required Non Construction Non Construction and non installation or service contracts exceeding $50,000 require that a 100% Supply Bond be furnished by the successful bidder (contractor).

6. Contract Warrantee Clause Contract must contain warrantee clause extending one year past the completion date to cover defective material and workmanship.

7. Bonds Required Security Bonds shall be issued by a company authorized to do business in the State of Texas with an A.M. Best Company rating of at least A- X and included on the U.S. Department of the Treasury Listing of Approved Sureties (Dept. Circular 570). The contractor shall be responsible for obtaining bonds and shall absorb any and all costs of such Bonds.

8. Insurance Required Automobile Automobile Liability insurance covering Any Auto with a combined single limit of $1,000,000.

9. Commercial (Comprehensive) General Liability Limits Comprehensive General Liability insurance with Aggregate, Occurrence and Personal Injury limits of : $1,000,000 Each Occurrence $1,000,000 Aggregate $500,000 Fire Damage $5,000 Medical Payments

10. Commercial (Comprehensive) General Liability Coverages Products, Completed Operations Independent Contractors Broad Form Property Damage Blanket Contractual Liability Pollution Liability Per Project Aggregate including CO XCU Exclusions removed Coverage must be shown on Certificate

11. Owners Protective Liability Coverages Who requires it? Why?

12. Professional Liability Limits required: One times project amount, minimum $1,000,000; maximum $5,000,000. Professional Errors & Omissions Liability insurance with limits of $1,000,000 may be required from all contractors that are licensed or certified as professionals; e.g., engineers, architects, designers, consultants, etc. Retroactive Date must precede date of contract Extended Reporting period three years past completion of contract

13. Workers Compensation Workers Compensation insurance with limits to comply with the requirements of the Texas Workers' Compensation Act (Statutory Limits) Employers Liability insurance with limits of $1,000,000

14. Property Insurance All Risk (including Flood & Earthquake) Property Insurance shall be required for any contract or work when property of the Owner is at risk or in the care, custody and control of the Contractor. Builders Risk insurance shall be required for all construction contracts requiring a bond.

15. Property Insurance Limits Limit of Insurance: Greater of the Contract Amount or Replacement Cost of the Scope of Work. Deductible: 1% of contract, $50,000 maximum deductible, unless otherwise approved by Owner. “Permission to Occupy” required.

16. Umbrella/Excess Insurance An Umbrella or Excess Liability policy with limits at least equal one times the contract amount, will be required for all contracts exceeding $100,000, up to a $25,000,000 limit.

17. Insurance Conditions Licensed & Stable All insurance coverages, except Professional Liability, shall be issued on an Occurrence basis by companies acceptable to Owner and licensed to do business in the State of Texas by the Texas Department of Insurance. Such companies shall have a Best's Key rating of at least "A- X".

18. Insurance Conditions Additional Insured & Waivers The Owner shall be shown as "Additional Insured" on the Property, General Liability, Automobile Liability and Umbrella (Excess) Liability policies. A "Waiver of Subrogation" clause in favor of the Owner will be attached to the Workers Compensation, General Liability, Auto Liability, Property and Umbrella (Excess) insurance policies. Copies of policy endorsements showing Owner must be provided: CG2010, CG2037, CG2404, CA0070, CA0032, WC0003 or their equivalents.

19. Mutual Additional Insured & Subrogation Waivers Texas Constitution, Article 3, Section 52 (a): “…the Legislature shall have no power to authorize any county, city, town or other political corporation or subdivision of the State to lend its credit or to grant public money or thing of value in aid of, or to any individual, association or corporation whatsoever, or to become a stockholder in such corporation, association or company.”

21. Additional Insurance Conditions All insurance must be maintained for one year following substantial completion with Certificates of Insurance provided. Contractor shall be responsible for payment of all deductibles; the Owner shall approve the deductibles selected. If any policy has aggregate limits, a statement of claims against the aggregate limits is required.

22. Insurance Conditions Notice of Changes All insurance certificates shall obligate the insurance company to notify the Owner of any non-renewal, cancellation or material change to any of the policies at least 60 days prior to the effective date of the non-renewal, cancellation or change.

23. Insurance Conditions Changes The Owner reserves the right to review the insurance requirements during the effective period of any contract to make reasonable adjustments to insurance coverages and limits when deemed reasonably prudent by Owner based upon changes in statutory law, court decisions or potential increase in exposure to loss.

24. Exhibit X If the insurance provisions are an exhibit to the contract, the requirements can be revised without changing the entire contract. Additionally, the contractor can provide their agent with a copy of the exhibit for preparation of the certificates.

25. Certificates  Who accepts them?  Do they really understand the requirements?  Are Best ratings checked?  Are the insurers licensed in Texas?  Are renewals tracked?

26. ACORD CERTIFICATE OF INSURANCE DATE (MM/DD/YY): Date prepared PRODUCER: NAME: Agent Name ADDRESS: Street Address CITY, STATE ZIP: City, State Zip PHONE : FAX: E-MAIL: THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. INSURERS AFFORDING COVERAGENAIC # INSURED: NAME: Contractor ADDRESS: Street Address CITY, STATE ZIP: City, State Zip PHONE : FAX: E-MAIL: PROJECT: Project Name & Number INSURER ADallas National INSURER BAmerisure23396 INSURER CMutual of Omaha INSURER DNational Union INSURER E INSURER F COVERAGES THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTHWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

27. COTYPE OF INSURANCEPOLICY # POLICY EFFECTIV E DATE POLICY EXPIRATIO N DATE LIMITS AGENERAL LIABILITY __COMMERCIAL LIABILITY __ CLAIMS MADE __ OCCUR __ __________________ AGGREGATE APPLIES: __ POLICY __ PROJ __ LOC Policy Number Date EACH OCCURRENCE$1,000,000 FIRE DAMAGE$500,000 MEDICAL EXPENSE$5,000 PERSONAL/ADV INJURYIncluded GENERAL AGGREGATE$1,000,000 PRODUCTS & COMPLETED OPERATIONS AGGREGATE$1,000,000 BAUTOMOBILE LIABILITY __ ANY AUTO __ ALL OWNED AUTOS __ SCHEDULES AUTOS __ HIRED AUTOS __ NON-OWNED AUTOS __ Policy Number Date COMBINED SINGLE LIMIT$1,000,000 BODILY INJURY (per person) BODILY INJURY (per accident) PROPERTY DAMAGE CWORKERS COMPENSATION AND EMPLOYERS LIABILITY ANY EXCLUDED? Describe below Policy NumberDate X STATUTORY LIMITS EL EACH ACCIDENT$1,000,000 EL DISEASE – EMPLOYEE$1,000,000 EL DISEASE - POLICY LIMIT$1,000,000 DEXCESS LIABILITY __ OCCUR __ CLAIMS MADE __ DEDUCTIBLE __ RETENTION $ Policy Number Date EACH OCCURRENCE Contract Amt AGGREGATE Contract Amt AGGREGATE PER PROJECT

28. PROFESSIONAL LIABILITY _ OCCUR X CLAIMS MADE X RETRO DATE Prior to Contract Policy Number Date EACH CLAIM$5,000,000 AGGREGATE$5,000,000 DEXCESS LIABILITY __ OCCUR __ CLAIMS MADE __ DEDUCTIBLE __ RETENTION $ Policy Number Date EACH OCCURRENCEContract Amt AGGREGATEContract Amt AGGREGATE PER PROJECT IdPROPERTY X ALL RISK X WAIVER OF SUBROGATION X ADDITIONAL INSURED X PERMISSION TO OCCUPY Policy Number Date LIMITContract Amt LOSS OF USE LIMIT INCREASED COST LIMIT SITE LIMIT DEDUCTIBLEAcceptable $ X POLICY FORM _____________ DESCRIPTION OF OPERATION/LOCATIONS/VEHICLES/SPECIAL ITEMS CERTIFICATE HOLDERCANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 60 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTIFICATION SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, AGENTS, REPRESENTATIVES. AUTHORIZED REPRESENTATIVE

29. DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES / EXCLUSIONS/SPECIAL PROVISIONS When required by written contract, those Parties listed in said contract, including the certificate holder, are listed as Additional Insured excluding Worker’s Compensation and Employer’s Liability, but limited to the operations of the Named Insured under said contract, and always subject to the policy terms, conditions and exclusions. Waiver of Subrogation is granted in favor of Certificate Holder when required by written contract but limited to the operations of the Named Insured under said contract, and always subject to the policy terms, conditions and exclusions. or IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon. prefer General Liability coverage includes Independent Contractors, Broad Form Property Damage, Blanket Contractual, Sudden and Accidental Pollution, XCU exclusions removed. Professional Liability, if coverage provided, includes three year extending reporting past completion of Contract. Property insurance coverage is All Risk and includes Permission to Occupy. The Owner shall be shown as "Additional Insured" on the Property, General Liability, Automobile Liability and Umbrella (Excess) Liability policies. A "Waiver of Subrogation" clause in favor of the Owner will be attached to the Workers Compensation, General Liability, Auto Liability, Property and Umbrella (Excess) insurance policies. Copies of policy endorsements CG2010, CG2037, CG2404, CA0070, CA0032, WC0003 or their equivalents showing Owner are attached and a part of this Certificate of Insurance. Claims against aggregate limits are:

30. Web Sites Best Ratings: http://www3.ambest.com/ratings/Rating sSearch.asp Certified Bonding Companies: http://www.fms.treas.gov/c570/c570_a- z.html

31. Web Sites Texas Administrative Code TITLE 28 INSURANCE PART 2 TEXAS DEPARTMENT OF INSURANCE, DIVISION OF WORKERS' COMPENSATION CHAPTER 110 REQUIRED NOTICES OF COVERAGE SUBCHAPTER B EMPLOYER NOTICES RULE §110.110 Reporting Requirements for Building or Construction Projects for Governmental Entities http://info.sos.state.tx.us/pls/pub/readtac$ext.TacPa ge?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc= &pg=1&p_tac=&ti=28&pt=2&ch=110&rl=110

32. www.robertreim.com